Novo Banco's Operations Unaffected by Chief Risk Officer's Dismissal, Says CEO

Novo Banco's CEO, Mark Bourke, has assured that the bank's business operations will remain unaffected by the alleged misconduct that led to the dismissal of its chief risk officer, Carlos Brandão. The Portuguese bank remains focused on its strategic goals and sustainable earnings despite the ongoing investigation into Brandão’s actions.

Brandão was dismissed on Tuesday following concerns about suspicious financial transactions linked to “his personal sphere.” The bank reported the matter to the central bank and filed a formal complaint with the Public Prosecutor’s Office, which has since launched an investigation. Brandão, who also served as a member of Novo Banco’s executive board, has not commented on the allegations, and Reuters was unable to reach him for a statement.

In an email to employees on Tuesday evening, which was shared with Reuters, Bourke emphasized the seriousness of the matter but clarified that it is “not related or associated with the bank.” He stated, “Its business will not be in any way affected by these events.” Bourke reassured employees that the executive board remains committed to pursuing the bank’s strategic objectives and delivering sustainable performance and earnings.

Novo Banco was established in 2014 after the collapse of Banco Espírito Santo (BES) and a subsequent multibillion-euro government bailout. In 2017, 75% of the bank was acquired by the U.S.-owned fund Lone Star. Recently, Novo Banco expressed readiness to explore an initial public offering (IPO), a move aligned with its long-term growth strategy.

Bourke credited the bank’s internal controls for detecting the allegedly suspicious transactions tied to Brandão. He stated that “all appropriate measures were soon taken to protect the bank.”

The Public Prosecutor’s Office confirmed that Brandão is formally suspected of “crimes of qualified tax fraud, money laundering, and forgery.” However, further details remain undisclosed due to judicial secrecy surrounding the investigation.

Morningstar DBRS, a credit rating agency, indicated that the case is not expected to impact Novo Banco’s credit ratings. The agency stated that “nor are there any significant or relevant Environmental, Social, and Governance factors to be considered.” Notably, in September, Morningstar DBRS upgraded Novo Banco’s credit rating to BBB with a stable outlook.

Despite the unfolding investigation, Novo Banco maintains its focus on stability and growth, with its leadership confident in the resilience of its business and internal governance systems.

By fLEXI tEAM