Probe for Portugal’s largest bank
PORTUGAL has launched a probe into the state-owned Caixa General de Depositos bank, with local media reporting that the investigation would centre on allegations of mismanagement and ruinous investments.
The Expresso weekly said the inquiry will focus on leadership at the bank, Portugal’s largest by assets, post2000, including loans issued between 2005 and 2010 during former socialist prime minister Jose Socrates’ time in office.
Mr Socrates was arrested in November 2014 and has been under house arrest since last October.
Prosecutors probing CGD are assessing “sub-prime loans worth tens or even hundreds of millions of euros ... investments in the Brazilian markets and ruinous credit facilities for Spanish companies”.
In August the European Commission and Portugal announced a 5 billion euro (US$5.6 billion) deal to bail out CGD, including a 2.7 billion euro injection of state funds.
Portugal’s banks have been under huge stress after the collapse of the country’s major lender Banco Espirito Santo in 2014 due to years of risky lending. –