By Sergio Goncalves
LISBON (Reuters) – Portugal’s banking resolution fund aims to sell its 13.54% stake in Novo Banco at the best possible price to maximise revenues, the fund’s chief Luis Maximo dos Santos said late on Tuesday.
Novo Banco, Portugal’s fourth largest bank, was created in 2014 from the collapsed BES after a state bailout. In 2017, U.S. fund Lone Star bought a 75% stake. The rest is held by the resolution fund, financed by Portugal’s banks, and the Portuguese state, which has 11.46%.
“In the past we wanted to minimise the fund’s costs, now we want to maximise its earnings,” dos Santos told a parliamentary committee.
Saying the fund wanted to sell “under the best conditions,” he said it would coordinate with Lone Star. The U.S. fund is considering an initial public offering or a full sale, worth about 5 billion euros ($5.18 billion).
“It is likely to be an IPO,” dos Santos said, but it is up to Lone Star to announce it at the right time and within the legal procedures, which could happen soon, he added.
The resolution fund is likely to choose a financial adviser, he said.
Portugal’s biggest five banks, which also include state-owned Caixa Geral de Depositos, Millennium bcp, Santander Totta and Caixabank’s Banco BPI, control more than 80% of its banking assets, but some analysts see room for further consolidation.
Bank of Portugal Governor Mario Centeno told Reuters last week that a Novo Banco IPO would benefit Portugal’s banking sector. He urged a cautious approach, however, as any further consolidation could affect the industry’s capital ratios, liquidity and costs.
Noting the importance of competition and that many banks compete with each other in the broad European Union market, he said the Portuguese market was “very national”.
($1 = 0.9649 euros)
(Reporting by Sergio Goncalves; editing by Inti Landauro and Barbara Lewis)
