Jean-Paul Chifflet, head of the French bank Crédit Agricole said his bank will participate in lawsuits filed against former directors of Banco Espírito Santo.
The Chief Executive said he has been deceived, and said he was following closely the BES audit.
"We regret having been misled by the family with whom Crédit Agricole was trying to create a true partnership to build the largest private bank in Portugal," said a clearly miffed Chifflet in a BBC interview.
Crédit Agricole announced it has registered a loss of 98% of its profit in the second quarter of this year compared to the same period last year, due solely to the impact of its losses at BES.
According to Crédit Agricole, the third largest in France, its 14.6% shareholding in BES has caused a loss of €708 million with its shareholding droping from €696 million in 2013 to a current estimated but highly suspect €17 million.
"The administration of Novo Banco indicated that it is considering taking legal action and we will join them," said Jean-Paul Chifflet.
In a press conference held after the presentation of Crédit Agricole’s depressing and depressed accounts, spokesman François Chaulet assured the press that "the situation is confined to BES."
BES, as it was known until Monday, is now Novo Banco and has received an injection of €4.9 billion to re-capitalise. Crédit Agricole’s shareholding remains with the old BES where the losses have yet fully to be reported.
Novo Banco gets all of the good assets that belonged to BES, such as deposits, and as if by magic now has a shiny new market capitalisation, while the 'bad bank' will hold all of the toxic assets from the failed financial grouprun by the disgraced Espirito Santo family.
“C’est la vie,” as they say in the world of banking.
Comments
My personal experience of KPMG audits in South Africa (including forensic audits) ... one day I'll write a book ...
but regarding BES and KPMG ... I'm not surprised at all ...
Similarly for bonds. Institutions purchase bonds knowing that yield is proportional to risk.
Yet we've recently seen the likes of vulture bond holders trying to sue Argentina for full interest and 100% bond value, even though they purchased the paper at 75% discount. Now Credit Agricole is trying to sue because its' 'investment' disappeared.
Any investment has risk and the higher the return the greater the risk. BES looked like a good bet to CA a few years back the same way Argentinian investors thought they'd never get burned.
Let these 'investors' learn a lesson in risk. It would be interesting to see the insurers pay out a few Credit Default Swaps at the same time.
Most of us only experience it at a low level but here billions of euros are missing !!!
So - both the French and the Angolans now claim to have been 'misled'. Billions missing in BES Angola. The Americans have lost hundreds of millions in betting against BES ... and the Spanish a few pesata's - How bad is THAT ?
Yet KPMG the auditors are now claiming to have been warning the BofP back in late 2103. (Not brilliant regulation of a hole in the accounts that allegedly existed since 2008.)
Still - if a total collapse of Portugal cleans out the s**t in Portuguese local and regional administration - it has to be good in the long run.