By Sergio Goncalves
LISBON (Reuters) – Novo Banco’s business won’t be affected by the alleged misconduct that led it to dismiss its chief risk officer and the Portuguese bank remains focused on pursuing its strategy and delivering sustainable earnings, its CEO said.
The bank fired chief risk officer Carlos Brandao on Tuesday, after reporting concerns over suspicious financial transactions in “his personal sphere” to the central bank and filing a complaint to the Public Prosecutor’s Office, which launched an investigation.
Brandao, whom Reuters has not been able to reach for comment, was also a member of the executive board.
CEO Mark Bourke, in an email sent to employees late on Tuesday and made available to Reuters, said that despite the investigation being a serious matter, “it is not related or associated with the bank” and “its business will not be in any way affected by these events”.
“The executive board will continue to pursue the bank’s strategic objectives and focus on achieving sustainable performance and earnings,” he said.
Novo Banco was created in 2014 from the remains of collapsed lender BES after a multibillion-euro government bailout.
The bank, 75% of which belongs to U.S.-owned fund Lone Star since 2017, said last month it was ready to explore opportunities to launch an initial public offering.
Bourke said it was the bank’s internal processes that detected Brandao’s allegedly suspicious operations and that all appropriate measures were soon taken to protect the bank.
The Public Prosecutor’s Office said in a statement that Brandao was a formal suspect of having committed “crimes of qualified tax fraud, money laundering and forgery”, without disclosing further details as the investigation is under judicial secrecy.
Morningstar DBRS said in a statement that the case was not expected to impact Novo Banco’s credit ratings, “nor are there any significant or relevant Environmental, Social and Governance factors to be considered”.
The ratings agency in September upgraded Novo Banco to BBB with a stable trend.
(Reporting by Sergio Goncalves; Editing by Mark Potter)
