Bank of Portugal set to announce Novo Banco sale decision

31 August 2015

The Bank of Portugal should announce today Monday the solution found for the sale of Novo Banco, the banking institution which inherited the so-designated ‘good’ assets of the failed Banco Espírito Santo, the Portuguese press reports.

The central bank’s decision may be one of three options: sell Novo Banco to China’s Anbang Insurance group; summon to a new negotiating round the group with the second-best proposal, the US fund Apollo Global Management; or decide to postpone the current sale process.

The Bank of Portugal has been negotiating with the Chinese group improvements to their proposal offering an estimated 3.5 billion euros.

The Chinese group’s revised proposal also admits the possibility of increasing capital in Novo Banco to improve the Portuguese institution’s financial ratios.

The sale of Novo Banco for 3.5 billion euros would imply a loss of 1.4 billion euros for the Resolution Fund, the body which injected 4.9 billion euros in BES to transform it into Novo Banco and maintain ongoing operations.

The Resolution Fund is composed of capital from the Portuguese state along with contributions from 80 Portuguese private financial enterprises and banks.

Besides the Anbang Insurance group, China’s Fosun International and the US fund Apollo Global Management are also taking part in the Novo Banco purchase process. (Macauhub/CN/PT)