Novobanco to float in H1 of 2024

Portugal’s Novobanco is preparing to be floated on the Lisbon stock market in 2024 according to its CEO, Mark Bourke.

However, he has warned that investor appetite may no be as whetted as it would have been before the Israel-Hamas war.
The bank, which is 75% owned by the US asset management fund Lone Star, and made a record profit of €640 million in the first nine months of 2023, is to prepare an Initial Public Offer (IPO) in H1, of 2024.
“We’re working so that we’ll be ready when our shareholders are ready to advance”, he said. The shareholders are Lone Star (75%), the Bank of Portugal Resolution Fund (13.04% and the Portuguese General Directorate of the Treasury and Finances. (11.96%)
However, the CEO has ruled out the scenario of selling the bank in a market that could pressure the institution over increasing its credit portfolio, with the possible risk that an IPO sale option could have on its non-performing loans ratio.
“Will we increase our credit portfolio because of an IPO? No, it will increase by one-digit percentages, but we’ll do I by maintaining the quality of the credit”, he assured, saying that the bank was not “suffering stress” because of the increases in interest rates.
Novobanco has renegotiated around 17,700 mortgage contracts this year to help out cash-strapped families according to the news source Negócios, mainly in terms of reductions in spreads/interest rates, reflected in the respective monthly repayments.
Mark Bourke also said it was worth exploring ending the Contingent Capital Agreement (CCA) with the Resolution Fund before 2025.
The contingent capital mechanism, was set up in 2017 whereby the Resolution Fund, as a shareholder, undertook to make capital injections into the bank to support the bank’s capital levels.
The bank’s record profit of €640 million to September was a 49% increase on the same period last year, explained by a financial margin that more than doubled to €831 million.