Novo Banco

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Novo Banco
Traded as Euronext: BES
Industry Financial services
Predecessor Banco Espirito Santo
Founded 2014
Headquarters Lisbon, Portugal
Key people
António Ramalho
Products Retail and investment banking, insurance, asset management, venture capital
Website www.novobanco.pt

Novo Banco is a Portuguese bank introduced on 4 August 2014 by the Bank of Portugal to rescue assets and liabilities of Banco Espírito Santo (BES). BES was the second largest private financial institution in Portugal in terms of net assets, as well as one of the oldest and most reputed Portuguese banks.

The rescue of Banco Espirito Santo came after weeks of increasingly bad news about the financial state of the lender, particularly its exposure to a cascade of companies headed by its founding Espirito Santo family headed by Ricardo Salgado. BES was to be split into a "good bank", renamed Novo Banco, and a "bad bank", which will house BES's exposures to the troubled Espirito Santo business empire as well as its Angolan subsidiary BESA. Novo Banco was recapitalised to the tune of 4.9 billion euros by a special bank Resolution Fund. The Portuguese state lends the fund 4.4 billion euros. The bank had a board for the 2014-2017 mandate presided by Vítor Bento.[1]

A month and a half after he started up his duties, Vítor Bento abandoned the leadership of Novo Banco and was replaced in September 2014 by Eduardo Stock da Cunha.[2]

The Resolution Fund is the bank’s only shareholder until a sale transaction takes place, this fund is a structure created in 2012 with contributions from Portuguese banks and from the financial sector,[3][4] and its operations are audited by the Portuguese regulator Banco de Portugal.[5]

Novo Banco incorporates every staff, branch, deposits, credit customers and holders of senior bonds of Banco Espírito Santo.[6]

In August 2014 Novo Banco launched its first communication campaign, to mark the beginning of the change in the image of the bank,[7] from the campaign, whose symbol was a butterfly, the bank launched its new identity on September 22, which incorporated the animal’s wings in the shape of a mathematical power, as a way to symbolize the commitment to “have once more the leading role it once had.”[8] The change in the brand was made progressively, starting by the facades in the bank’s branches.[9]

On 30 June 2015, the resolution fund had received three binding bid offers on Novo Banco, from the Spanish banking group Banco Santander SA, the Chinese insurance group Fosun International Limited, the privately owned Chinese insurer Anbang Insurance, and the American private-equity firm Apollo Global Management.[10] One of the bidders opted to improve their offer on 7 August 2015, the selection and sale to the final winner of the bidding process is expected to take place during Q3-2015.[11] On 20 August, Banco de Portugal released a statement that the final phase of the sale process, was expected to conclude by 31 August;[12] in September however the sale was cancelled owing to the offers being deemed unsatisfactory.[13]

In March, 2016, it was announced that Portuguese state-rescued lender Novo Banco was planning to cut 1,000 jobs to help to reduce operating costs by 150 million euros ($163 million) as part of its restructuring plan agreed with the European Union, the proposed job cuts equated to 14 percent of the bank's workforce at the time.[14]

In October 2016, the resolution fund had received four offers on Novo Banco from China's Minsheng Financial Holding, Apollo and Centerbridge and Lone Star.[15] In January 2017, Aethel Partners made an offer to buy Novo Banco.[16]

In March 2017, the Portuguese Central Bank announced that Lone Star Funds will acquire 75% of third largest Portuguese bank, Novo Banco, in return for a capital injection of €1bn, the other 25% will be retained by the Portuguese bank's resolution fund. In October 2017 the deal was closed and Lone Star Funds started controlling 75% of Novo Banco.

References[edit]

  1. ^ New CEO, CFO Chosen for Banco Espirito Santo The Wall Street Journal, retrieved on 22-08-2017
  2. ^ Lloyds Executive Named to Run Portugal's Novo Banco The Wall Street Journal, retrieved on 22-08-2017
  3. ^ "Novo" BES recebe ajuda de 4,9 mil milhões de euros através do fundo de resolução, Jornal de Negócios (03-08-2014), retrieved on 08-08-2014
  4. ^ Portugal in €4.9b rescue of Banco Espirito Santo, Gulf News (04-08-2014)
  5. ^ Tudo o que já se sabe sobre o Novo Banco e o BES, Observador (03-08-2014), retrieved on 08-08-2014
  6. ^ Tudo o que já se sabe sobre o Novo Banco e o BES, Observador (03-08-2014), retrieved on 08-08-2014
  7. ^ 'Novo Banco. Um bom começo', promete Vítor Bento Diário Económico (21-08-2014)
  8. ^ Novo Banco muda de símbolo e fica apenas com as asas da borboleta, Jornal de Negocios (22-09-2014)
  9. ^ Logótipo do Novo Banco nos balcões a partir de hoje, Observador (22-09-2014)
  10. ^ "Portugal's Novo Banco gets three binding offers". MarketWatch. 30 June 2015. 
  11. ^ "Bank of Portugal receives one improved offer for Novo Banco". Reuters. 7 August 2015. 
  12. ^ Novo Banco - Negotiations with Anbang run until the end of August (Portuguese)
  13. ^ Portugal’s auction of Novo Banco collapses, Financial Times, retrieved on 15 September 2015
  14. ^ https://www.reuters.com/article/portugal-novobanco-employment-idUSL8N1693SQ
  15. ^ Goncalves, Sergio. "China's Minsheng takes on U.S. funds in bidding for Novo Banco". Reuters UK. Retrieved 2017-03-17. 
  16. ^ Patrick, Margot; Kowsmann, Patricia (2017-03-10). "Can a Mystery Bidder Spoil Portugal’s Novo Banco Sale?". Wall Street Journal. ISSN 0099-9660. Retrieved 2017-03-17. 

Coordinates: 38°43′19″N 9°08′52″W / 38.7219°N 9.1478°W / 38.7219; -9.1478