ECB tells Portugal’s Novo Banco to fill €1.4bn hole in finances

The European Central Bank has ordered Portugal’s Novo Banco to fill a €1.4bn hole in its finances, possibly delaying its planned sale and hampering Lisbon’s efforts to draw a line under its biggest banking collapse.

The request to repair Novo Banco, created from the failed Banco Espirito Santo (BES), presents a challenge for any anti-austerity, Socialist-led government that could come to power in coming weeks after a parliamentary vote this week.

Of nine banks across the eurozone tested by the ECB as a follow-through on wider checks last year, only Novo Banco was found to be short of capital. It has two weeks to present a plan of action and nine months to plug the gap.