Novo Banco ‘not being sold off’ to rival but strengthened for IPO

Novo Banco’s CEO, Irishman Mark Bourke, said that the bank “is not currently in the process of being sold.”

The CEO of Novo Banco, one of Portugal’s largest banks, has said that it is not in the process of being sold off and that the aim of the current management is to strengthen the institution with a view to a “very viable” operation to float its shares on the stock exchange.

In an interview with Lusa, on the day that Novo Banco posted a 2022 profit of €560.8 million, its CEO, Irishman Mark Bourke, said that Novo Banco “is not currently in the process of being sold.” 

He cited a recent statement from the bank’s largest shareholder, US investment fund Lone Star, in which it denied having started drawing up contacts to sell its stake, and that it does not intend to start doing so this year. That was after reports in Spain that Lone Star was sounding out that country’s major banks to sell Novo Banco for around €2 billion.

“Spanish newspapers started talking about a valuation and talks,” Bourke told Lusa in an interview, citing the shareholder’s statement. “Lone Star then made a statement saying that there was no process.” 

As for whether Novo Banco itself is on the lookout for assets to buy, Bourke said that “it is more likely that it will buy activities or portfolios” that are complementary to its business – such as payments, asset management, “apps” – “rather than buying banks.”

However, he said, as is customary in the financial sector, management will always look at possible opportunities: “There are not many banks. But there are opportunities that come up and we look at every opportunity that comes up.” 

According to Bourke, the “best and most viable option” for Novo Banco is to move towards an initial public offering of shares on the stock exchange, even though that decision is one for the shareholders, in order to strengthen the bank. 

“We do not have an IPO process underway, but we see it as a very viable option,” he said. 

The conclusion of the Novo Banco restructuring process means that there is increasing talk of bank consolidation in Portugal. On the one hand, it is known that Lone Star bought Novo Banco with a view to first making it profitable and then selling it, so turning a profit; on the other, there is talk in the sector that other banks may have more or less weak shareholders, and that Lone Star may now have the initiative there. 

Original Story: Eco News | Lusa 
Photo: Novo Banco
Edition: Prime Yield