Economy Minister freezes pension rights of sacked chairman of CatalunyaBanc

The Economy Ministry has suspended the multi-million-euro pensions of Adolf Todó, the former chairman of nationalized bank CatalunyaBanc, and its chief executive officer, Jaume Masana, who were dismissed from the lender on Friday, financial sources confirmed Monday.

According to CatalunyaBanc’s latest annual report, Todó had accumulated pension rights of four million euros, while Masana was in line to receive 1.5 million.

The Economy Ministry, headed by Luis de Guindos, justified the freezing of their pension rights given that the prosecutor’s office in Barcelona is investigating the legality of the remunerations contracts signed by the bank before it was nationalized.

CatalunyaBanc, the commercial banking arm of savings bank CatalunyaCaixa, has received state funding of 12.050 billion euros after being nationalized in order to shore up its balance sheet, which was seriously affected by the bank’s exposure to the property bubble in Spain, which burst in 2008.

The law reforming the financial sector fixes maximum amounts of compensation in the case of top bank officials being removed from the posts, which in the case of savings banks is 600,000 euros. However, the law does not apply to pension rights acquired before the time the state intervenes in a lender.

According to sources in the sector, the state Orderly Bank Restructuring Fund (FROB) decided to remove Todó and Masana because of the deterioration in the situation at the bank amid expectations that things looked set to get even worse rather than better.

Todó was appointed to Caixa Catalunya in 2008. He came from Caixa Manresa, which was one of the savings banks that merged to form Catalunya.

FROB replaced Todó with Carlos Pla, who until three weeks ago headed up the savings bank CajaSur. Pla’s task is to complete the restructuring of the bank, reducing the scope of its activities to commercial banking operations within Catalonia with a view later to privatizing the bank and recover taxpayers’ money.

The FROB also named Juan María Hernández and Francisco Orenés as directors of CatalunyaBanc. Hernández will act as chief executive until Pla assumes his duties on June 1.