“For the fourth consecutive year, a positive trend is noted in the financial condition of the Resolution Fund, following an increase in equity of 239.6 million euros recorded in 2023, 232.8 million euros in 2022, and 107.2 million euros in 2021,” according to the 2024 Report and Accounts.
Thus, the Resolution Fund’s equity ended 2024 with a negative balance of 6.475,8 million euros.
The document outlines that there was a positive contribution of 316.6 million euros to the equity in 2024, notably including 188.4 million euros from banking sector contributions, 37.9 million euros from contributions paid on contributory processes, and 26.7 million euros from interest.
The Resolution Fund also received 63.7 million euros from Oitante, the asset manager of the remaining Banif assets.
By the end of 2024, the Resolution Fund’s debt remained at 7.511,9 million euros, with 85% owed to the State and 15% to a group of national banks.
Luís Máximo dos Santos, who leads the institution, explained that no debt amortization was again conducted “as the applicable interest rate remains at zero until the next reset dates,” opting instead to earn income from financial applications.
The Report and Accounts of the Resolution Fund also note that 2024 marked the end of the Contingent Capital Agreement (CCA) established during the sale of Novo Banco.
“The end of the CCA occurred a year before the initially scheduled deadline due to an agreement signed in December 2024, which allowed, notably, to extinguish all obligations of the Resolution Fund arising from the contingent capitalization mechanism without any additional transfer to Novo Banco,” explains the Resolution Fund, adding that this marks “an end of cycle” for the institution.
While the CCA was in effect, the fund “was called upon to make payments to Novo Banco totaling 3,405 million euros” and was “exposed to the risk of additional payments.”
At the end of 2024, the Resolution Fund comprised 39 participating institutions, two fewer than in 2023, following the exit of FCE Bank, PLC – Branch in Portugal, which closed, and the incorporation of Caixa Económica do Porto into Caixa Económica da Misericórdia de Angra do Heroísmo.
Established in 2012 to provide financial support for resolution measures adopted by the Banco de Portugal (BdP), the Resolution Fund recorded positive annual variations of its equity in 2013 and 2014, with 182 and 140 million euros respectively.
In the six subsequent years, between 2015 and 2020, the Resolution Fund’s equity collectively decreased by 7.636,7 million euros.
