Lisbon, April 29, 2026 (Lusa) - The sale of Novo Banco to the French group BPCE will be finalised this week, marking the Portuguese state’s exit from the capital of the bank, which was established almost 12 years ago to protect Banco Espírito Santo (BES) depositors.
Key points regarding the establishment and full sale of Novo Banco:
+++ The end of BES and the creation of Novo Banco +++
On 3 August 2014, the historic Banco Espírito Santo (BES), Portugal’s third-largest banking group, came to an end.
The Bank of Portugal, Portugal's government, the European Commission and the European Central Bank (the authorities) decision came four days after the bank had reported a record half-yearly loss of €3.6 billion, after serious financial irregularities had been uncovered (which led to criminal proceedings).
By that time, Ricardo Salgado had been forced to step down as CEO of BES (in June 2014), with Vítor Bento (current president of the Portuguese Banking Association) leading the bank.
On 3 August 2014, BES became a bank in liquidation, holding the assets initially deemed toxic, and Novo Banco was created to protect deposits, owned and capitalised by the Bank Resolution Fund (a public body used to resolve failing financial institutions without resorting to taxpayer bailouts).
+++ Partial sale of Novo Banco +++
Upon its creation, the authorities announced that the aim was to privatise the bank as soon as possible, which did not happen until 2017.
A majority stake in Novo Banco (75%) was sold to the US fund Lone Star, which paid no purchase price, investing €1 billion in Novo Banco to recapitalise it.
Lone Star’s aim was to make the bank profitable quickly so that it could be sold at a profit in the medium term.
+++ Controversial capitalisation mechanism +++
The sale to Lone Star included a capitalisation mechanism that gave the Resolution Fund the responsibility to compensate Novo Banco for losses on so-called 'toxic’ assets (mainly non-performing loans and real estate) up to €3.89 billion.
In the following years, the Resolution Fund invested €3.405 billion into the bank, sparking significant public, political controversy, and litigation between Novo Banco and the Resolution Fund.
The arrangement was terminated ahead of schedule in December 2024 following an agreement between Lone Star and the state, facilitating the payment of dividends to shareholders and the sale of the bank.
During his tenure as CEO from August 2016 to August 2022, António Ramalho became the face of the bank’s defence regarding the use of public funds, particularly during press conferences.
With the departure of Ramalho, the Irishman Mark Bourke took over, and since then the bank has not held any press conferences to answer questions from journalists.
+++ Losses turn into profits +++
Heavy losses marked the bank’s early years.
Between the second half of 2014 and 2020, the bank recorded losses exceeding €7 billion.
The first year with a net profit was 2021, and since then, profits have been rising (€184.5 million in 2021, €560.8 million in 2022, €743.1 million in 2023, €744.6 million in 2024 and €828 million in 2025).
+++ Agreement to sell Novo Banco +++
In June 2025, an agreement was reached to sell Novo Banco to the French banking group BPCE for €6.4 billion.
Currently, Lone Star owns 75% of the bank and the Portuguese state owns 25% (of this capital, the Bank Resolution Fund holds 13.54% and the DGTF – Directorate-General for Treasury and Finance holds 11.46%), meaning that all shareholders had to agree to the sale and the terms.
+++ Executive bonuses +++
In September 2025, the Público newspaper reported that Lone Star executives and Novo Banco managers were set to receive bonuses totalling €1.1 billion, to be paid by the shareholder Lone Star upon the completion of the sale of Novo Banco.
At the time, Lusa contacted the Resolution Fund and the finance ministry to enquire whether they were aware of the arrangement and if they believed in a conflict arising from a shareholder (Lone Star) paying bonuses to independent managers of Novo Banco but received no response.
The bank’s staff subsequently protested against their exclusion from the sale bonus payments.
Over 2,700 staff signed a petition addressed to the board demanding a bonus equivalent to two months’ salary, describing the situation as an injustice, saying that while top management and some directors were receiving multi-million bonuses, the majority of the workforce was being denied any form of financial recognition.
The employees ultimately won their campaign, and it has been confirmed that staff bonuses will be paid in May 2026.
+++ Criminal Investigation Police searches +++
The sale of BES’s ‘toxic’ assets, which Novo Banco acquired, led to Criminal Investigation Police searches at Novo Banco’s headquarters and the KPMG (consultancy firm) offices on suspicion of criminal offences, in October 2025.
The searches took place on the same day as the ceremony for the sale of the state’s shareholdings at the finance ministry.
When news of the searches broke, those involved in the session left the premises without answering any questions.
Over the years, Novo Banco has faced criticism over suspicions that it sold assets below market value.
+++ Conclusion of the sale +++
The sale is due to be finalised this Thursday, 30 April.
BPCE will pay more than the €6.4 billion initially agreed, according to Lusa’s information.
The price adjustment is due to factors such as the improvement in asset performance (in 2025, Novo Banco posted profits of €828 million), and a reduction in liabilities (for example, the Constitutional Court cancelled the additional banking levy in 2025 and refunded the money the banks had paid).
If the amount payable was €6.4 billion, Lone Star would receive €4.8 billion and the state €1.6 billion. With the revised figure higher, the amount each shareholder receives will also increase.
In Lone Star’s case, the amount to be received (and dividends already received) represents a significant capital gain compared to the €1 billion it invested in the bank upon its acquisition in 2017.
For the state, the money to be received from the sale and previous dividends will help mitigate the total cost of the Banco Espírito Santo (BES) resolution, which so far has cost the public coffers around €8 billion (mainly as a result of the initial capitalisation of Novo Banco and the Resolution Fund recapitalisations).
The finance ministry said in October that the sale of the state’s shares in Novo Banco, and the dividends received, “enables the public sector to recover almost €2 billion of the funds invested in the bank”.
Novo Banco’s dividends for 2025 (almost €500 million), will remain with BPCE, as the last general meeting decided to withhold payment, leaving them with the bank. BPCE may still receive special dividends, according to press reports.
+++ New board members +++
Irishman Mark Bourke remains as CEO of Novo Banco, at least for the time being, although the French group BPCE will appoint new members to management and executive positions.
Three new members will join the General and Supervisory Board, though their names have not yet been disclosed.
Novo Banco will also change its auditor, currently EY (Ernst & Young), due to potential conflicts of interest.
Many of these key decisions are expected to be finalised during Wednesday's general meeting, and the bank is expected to issue a formal announcement this Thursday.
IM/MYAL // AYLS
Lusa
