Going, going, gone! Novobanco sold to France’s BPCE Group for €6.4Bn
Rumours were swirling in Lisbon last week that Novobanco had likely been sold to the French banking group BPCE, but the news was finally confirmed on Friday.
An agreement was reached between the US equity fund Lone Star, which holds 75% of the bank, and the transfer should be made to the French group at some time in the first half of 2026 in an amicable acquisition.
Lone Star signed a Memorandum Of Understanding for the sale of its shareholding in the bank to BPCE according to a communique sent to Portugal’s securities market regulator CMVM today (Friday, June 13).
The sum for its 75% share in the bank is €6.4Bn – five time more than the US vulture fund had originally invested back in 2017 (€1Bn).
However, the tax payer, Portugal’s banking system and the Portuguese State had to pay a much stiffer price to keep the bank afloat and restructure it for sale since 2014 – anywhere between €8Bn and €11Bn.
“This transaction completes the transformation process of Novobanco undertaken with the help of its stakeholders, making it one of the most profitable in Europe with a medium-term Objective Rentability on Tangible Capital (RoTE) above 20%” states Novobanco.
“The majority shareholder’s decision to proceed with a direct sale to BPCE represents a strategic opportunity, positioning Novobanco to integrate with one of the largest and most solid European financial groups,” the Portuguese bank adds, stressing that “BPCE will strengthen its role as an important partner in the development of the Portuguese economy.”
At the same time, the French group BPCE said in a statement that it had signed the memorandum for a 75% stake in the capital of Novobanco from Lone Star Funds. The transaction, representing an amount of approximately €6.4 billion (for 100% of the capital) and a multiple of about 9 times the annual earnings,” underlines that this “is the largest transnational acquisition in the eurozone in more than 10 years.”
BPCE has already stated that it will not change the name or brand of the bank (at least for now) or make redundancies as staff and the bank union had feared.
BPCE also confirmed that it would not be announcing any changes to the senior management structure at the bank and that the CEO Mark Bourke would continue on.
As reported by news source Expresso on Thursday, June 12, this acquisition responds to the new phase of BPCE regarding the “implementation of its strategic plan “Vision 2030″, aimed at the development and diversification of BPCE in France, Europe and the rest of the world”.
The French group said in a statement that it (BPCE) is “the second largest French bank and the fourth largest European bank”, and that “after the completion of the transaction, Portugal would become the Group’s second largest national retail banking market.
In a statement sent to the newsrooms, BPCE also states that it is “in talks with the Portuguese Government, the Bank and the Resolution Fund with a view to acquiring its stakes in Novo Banco (11.5% and 13.5%, respectively), under identical conditions”.
Novobanco posted profits of €177,2 million in 1Q, down €3.4 million on the first three months of 2024. Its financial margin fell 6,7% while profits from bank charges soared by 12,3%. In 2024 it made a profit of just over €744 million – a record since it was founded in 2014 on the ashes of Banco Espírito Santo which had collapsed that year.
Nicolas Namias, CEO of BPCE stated in a communiqué that the financial conditions of the transaction reflect a disciplined and thorough valuation approach, as well as our confidence in the capacity of Novobanco to create value over time.
The administration and staff at BPCE are all particularly enthusiastic at the prospect of welcoming Novobanco, its management and 4,200 staff and together write a new chapter for growth, innovation and performance in Europe.”
In Portugal, Novobanco holds a 9% share of the market and 14% share of the companies market as the fourth largest bank in Portugal with 1.7 million clients and a corporate loans portfolio of around €17Bn. It also has 290 branches across Portugal and its overseas autonomous territories.
Novobanco CEO Mark Bourke also states in the note released by the CMVM, that “through this transaction, BPCE intends to facilitate the financing of companies and the projects of national families, also extending the range of services offered to Portuguese customers”, and that “it will mobilise its experience to reinforce the creation of value in close collaboration with Novo Banco”.
The executive director of Lone Star, Kambiz Nourbakhsh adds, “this agreement marks a decisive moment in the transformation of Novobanco and is proof of the extraordinary efforts of its leadership and employees over the past eight years.” He also underlined that “in BPCE, we have found a bank (Novobanco) that has the experience and vision to build solid foundations and support the bank in executing its long-term growth strategy.”
