Novo Banco posts €500 million in profits; is NOT for sale

CEO says bank being strengthened for “very viable” operation to float shares on stock exchange

The CEO of Novo Banco – described by Lusa as “one of Portugal’s largest banks”; also one that has cost billions of euros in ‘rescuing’ – has said that it is not in the process of being sold. 

The aim of management is to strengthen the institution with a view to a “very viable” operation to float its shares on the stock exchange, he said.

In an interview with Lusa on the day Novo Banco posted a 2022 profit of €560.8 million, CEO, Irishman Mark Bourke, refuted stories that recently appeared in the Spanish press suggesting the bank’s largest shareholder, US investment fund Lone Star, was drawing up contracts to sell its stake (for around €2 billion).

“Spanish newspapers started talking about a valuation and talks (…) Lone Star then made a statement saying that there was no process,” he said.

According to Bourke, the “best and most viable option” for the bank that emerged from the toxic fallout of BES is to move towards an initial public offering of shares on the stock exchange, even though that decision is one for the shareholders, in order to strengthen the bank.

“We do not have an IPO process underway, but we see it as a very viable option,” he said.

Conclusion of the desperately costly Novo Banco restructuring process means that there is increasing talk of bank consolidation in Portugal. On the one hand, it is known that Lone Star bought Novo Banco with a view to first making it profitable and then selling it; on the other, there is talk in the sector that other banks may have more or less weak shareholders, and that Lone Star may now have the initiative there.

At the end of February, officials at BCP Millennium reiterated that it remains focused on growing organically – but that it would obviously have to look at Novo Banco if the bank is put up for sale.

In December, in interview with Jornal de Negócios, governor of the Bank of Portugal, Mário Centeno, said that a merger between Novo Banco and BCP would be positive, but stressed that he was only “being pedagogical in relation to the market and how” he sees banking; any comments from the central bank can “move the market” and that is not his role, he stressed.

As for Caixa Geral de Depósitos, the State-owned savings bank that is Portugal’s largest,  CEO Paulo Macedo, said earlier this month that it is focused on returning capital to the State, albeit it still might make acquisitions, “whether large or small”.

In January, during a parliamentary hearing, Macedo said that now CGD is stronger, “it would not happen that a foreign bank would buy Banif and Banco Popular for a euro” as happened in the past…

Source: LUSA