BPI would be biggest private bank in Portugal in merger with Novobanco
If Spain’s CaixaBank snaps up Novobanco and merges it with BPI, it would make the latter the largest clearing bank in Portugal with assets of €83.5Bn, overtaking Millennium bcp which in 2024 had €66.4Bn.
For the Spanish bank, it is important to grow in Portugal and that is why it is betting all its chips on its negotiations with the US private equity fund Lone Star to buy Novobanco.
In its favour, it has the drag-along agreement to which both the General Directorate of Treasury and Finance (DGTF), with 11.46%, and the Resolution Fund, with 13.54% of Novobanco, are bound.
This means that if Lone Star sells 75%d of Novobanco to CaixaBank, the other two shareholders are obliged to sell their stake, which would be added to the total.
The stumbling block could be created by the Bank of Portugal and competition authorities. The Bank of Portugal would prefer an IPO because it would retain the autonomy of the bank which would remain in Portugal as a listed financial institution on the Lisbon stock exchange. However, the European Central Bank could look favorably on greater concentration and a larger bank which would be achieved through a merger with BPI.
Also in the running is BPC according to sources heard by Jornal Económico despite the fact that its CEO Miguel Maya has stated that “Novobanco is not fundamental for BCP’s strategy.”
If BCP were to buy Novobanco, it would have a combined asset value of €109Bn, exceeding that of State-owned Novobanco which is worth €94.1Bn.
However, Miguel Maya has also said that BCP (20% market share) would look into the purchase of Novobanco’s shareholders decide that an IPO is not interesting for them. (Unlikely) Then we would look into it without any hesitation,” he said.
State-owned Caixa Geral de Depósitos (CGD), which has a CET1 ratio that is double that required and a buffer of €3.5Bn-€5.5Bn (12%) could also buy the bank. However, that would put its assets at €135.2Bn and give it a market share of 40% which the competition authority would be unlikely to allow.
Finally, the option of selling to the French group BPCE, owner of Natixis, is the one that seems to have the fewest obstacles. The group in Portugal has a residual presence (it has Banco Primus and a branch of Natixis), so it does not trigger Competition alarms. It would mark the return of the presence of French banking in retail banking in Portugal, and the probability of maintaining Novobanco as an autonomous bank would be greater.
