US private equity firm Lone Star Funds has signed a memorandum of understanding (MoU) to sell its entire 75% stake in Portugal-based lender Novo Banco to French banking group BPCE for an enterprise value of €6.4 billion.
The proposed deal includes Novo Banco’s management team and 4,200 employees and, financed through BPCE’s own cash funds, is expected to close “in the first half of 2026”, Lone Star says, subject to the approval of employee representative bodies.
Novo Banco is the remaining half of now-defunct Lisbon-based bank Banco Espírito Santo, which was divided up by the country’s central bank in 2014. Lone Star went on to acquire its majority stake in Novo Banco for €1 billion in 2017.
Since the takeover, Lone Star says the bank has “significantly de-risked its balance sheet, reducing non-performing loans to de minimis levels, and has made substantial investments in digital transformation“, while also becoming profitable.
Novo Banco now stands as the fourth-largest bank in Portugal, serving 1.7 million retail customers and SMEs with card and account services, loans, mortgages, savings and investment products, boasting a corporate loan book of €17 billion.
On completing the transaction, BPCE says Portugal would become the group’s second-largest domestic retail market, with CEO Nicolas Namias confirming plans to “actively participate in financing the Portuguese economy”.
Source: https://www.fintechfutures.com/
