Press release of Banco de Portugal on the conclusion of the sale of Novo Banco
Banco de Portugal and the Resolution Fund concluded today the sale of Novo Banco to Lone Star, with an injection by the new shareholder of €750 million, which will be followed by a further injection of €250 million to be delivered by the end of 2017.
The conclusion of this operation brings to a close a complex negotiation process with the new shareholder, European institutions and other domestic institutions, in close cooperation with the Government.
The completion of the sale announced on 31 March brings about a very significant increase in the share capital of Novo Banco and terminates the bank’s bridge bank status that has applied since its setting up.
As of this date, Novo Banco will be held by Lone Star and the Resolution Fund, which will hold 75% and 25% of the share capital respectively. It will be endowed with the necessary means for the implementation of a plan ensuring that the bank will continue to play its key role in the financing of the Portuguese economy.
This will also make it possible to strengthen the internal and external perception of the Portuguese banking sector, as a result of the successful outcome of an open, transparent and competitive sale process of international concern, which met the requirements of the European Central Bank and the European Commission, and allowed for the entry of new investors into the financial system, diversifying its funding sources.
With the conclusion of this sale, the purposes underlying the resolution of Banco Espírito Santo (BES) are fully met. Even though BES faced irreparable financial imbalance and the imminent suspension of business in 2014, it was possible (i) to ensure the continuity of most of the business in one of the most significant financial institutions of the Portuguese economy; (ii) to protect depositors, who did not undergo any losses; (iii) to maintain also the capacity for financing enterprises and households; (iv) to minimise the burden on public funds and the banking sector, as far as was permitted by the reconciliation of the different goals. In other words, the stability of the financial system was safeguarded at all times.
For all these reasons, the sale of Novo Banco was a decisive step towards strengthening the stabilisation of the domestic banking sector.
In the wake of the measures taken to strengthen the capital levels of the sector’s main institutions, and the initiatives under way in the financial system to tackle the challenges posed by non-performing exposures, the domestic banking sector is today better prepared to provide the necessary funds for the development of the Portuguese economy.
The Board of Directors of Banco de Portugal is grateful to all those involved, especially the technical teams, for their dedication and commitment in the sale process of Novo Banco.