BAD BANKING

‘Caja’ managers intone public remorse at bank's failings in press ad

Novagalicia apologizes in newspapers for financial shambles and abusive sale of shares to unwitting customers

The former chairman and chief executive officer of nationalized lender Novagalicia Banco published advertisements in the Spanish press on Thursday to publicly express their regret at the failures committed by the previous management of the bank that led to it being taken over by the Bank of Spain.

José María Castellano took over as chairman of Novagalicia and César González Bueno as chief executive in September of last year after the previous management abandoned ship with scandalously generous golden parachutes they had awarded themselves. Novagalicia Banco was the commercial banking arm set up by the merger of two Galician savings banks, or cajas.

"The customers of the cajas merit having the errors committed acknowledged, words of apology and a commitment to find solutions," the advertisement reads.

The two bankers expressed particular regret on the sale of preference shares to customers of the bank who had scant knowledge of such financial products and now face huge losses on their investment.

They also highlighted disastrous investments by the bank in the real estate sector.

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