Novo Banco Dismisses Chief Risk Officer Over Suspicious Transactions, Launches Investigation

Novo Banco, Portugal’s fourth-largest lender, has terminated its Chief Risk Officer, Carlos Brandão, following the discovery of “suspicious” financial transactions. The bank has reported its concerns about Brandão’s conduct to the banking regulator and filed a complaint with the Public Prosecutor’s Office, which has initiated an investigation into the matter.

In a regulatory filing on Tuesday, the Lisbon-based bank announced Brandão’s immediate dismissal, stating, “This decision was taken following the identification, through the bank’s internal processes, of suspicious financial transactions in this individual’s personal sphere.” Novo Banco emphasized that the issue is entirely unrelated to the bank’s activities, clients, finances, or operations.

“The suspected issue is not related nor associated, in any way, with the bank,” the statement reiterated. Novo Banco declined to provide details regarding the nature of the transactions in question.

Brandão, who also served as a member of the executive board, joined Novo Banco in July 2017 and was appointed Chief Risk Officer in September 2022. His dismissal follows an internal investigation that brought the transactions to light.

The bank assured stakeholders that the matter “has no impact whatsoever on clients, clients’ accounts or transactions, on the bank’s finances or activity, on its commercial operations, risk management system or employees.”

Until a permanent replacement is appointed, Chief Executive Officer Mark Bourke will assume the responsibilities of Chief Risk Officer on an interim basis, Novo Banco confirmed.

Novo Banco was established in 2014 as a successor to Banco Espírito Santo (BES) following its collapse and a multi-billion-euro government bailout. Since 2017, the bank has been 75% owned by the U.S. private equity firm Lone Star.

The bank recently announced its readiness to explore an initial public offering (IPO) in 2025. Sources cited by Reuters in September indicated that Lone Star is considering both a sale and an IPO as potential strategies.

Novo Banco’s decision to dismiss Brandão underscores its commitment to transparency and integrity as it continues preparations for a public listing.

By fLEXI tEAM