BPCE pays premium of 70% to boost Novobanco growth

France’s BPCE group, which has signed a Memorandum of Understanding to purchase Portugal’s Novobanco, has agreed to pay almost 1.7 times of the book value, meaning 70% above the average that would be expected to pay in the Euro Zone’s financial sector.

“The transaction represents (…) a multiple of about nine times the annual earnings” of Novo Banco, notes BPCE, adding that this is “the largest transnational acquisition in the Eurozone in over 10 years”.

This means that the French bank will only be able to recover the entire investment it is now making in almost a decade. “We are a long-term investor,” said Nicolas Namias, CEO of BPCE, at the press conference where he announced the purchase, the group’s first outside France.

Last week it was announced by both Novobanco and BPCE that the French banking group had offered €6.4Bn, an impressive amount given the value of the bank’s assets which are estimated to be worth €42.4Bn.

Novobanco is the 4th largest bank operating in the Portuguese market with 1.6 million customers and a 9.8% market share.

In a note sent to the Portuguese securities market regulator CMVM last week, Novobanco informed that its majority shareholder, Nani Holdings (owned by Lone Star) had signed a Memorandum of Understanding for the sale of its shareholder position to BPCE, for an amount equivalent to an appreciation of approximately €6.4Bn, at the end of 2025, for 100% of the share capital.”

It was this high amount, above the actual book value worth of the bank, that BPCE trumped the competition from Spain’s CaixaBank. In other words BPCE paid over the odds for the bank at +1.7 times the book value which was €4.7Bn in 2024.

BPCE is likely to complete the purchase of Novobanco in the first half of 2026 and has already dismissed notions that it might replace the senior management structure at the bank.

“The bank’s administration has done an incredible job in recent years becoming one of the most profitable banks in Europe. Of course, we will continue to have the efforts of the executive commission and Mark Bourke will continue to work with us,” said BPCE’s group CEO, Nicolas Namias.

He also said the BPCE had no intention of changing the bank’s name or brand which apparently had been created by the Governor of the Bank of Portugal at the time (2014), Carlos Costa in just 10 minutes.