French banking group BPCE agreed to acquire Lone Star’s Novo Banco, the Portuguese lender led by former AIB chief financial officer (CFO) Mark Bourke, in a deal worth an estimated €6.4 billion in what’s set to be a key cross-border acquisition for Europe.
The transaction is expected to close during the first half of 2026, Novo Banco said in a regulatory filing on Friday. “The decision by the majority shareholder to pursue a direct sale to BPCE represents a clear strategic opportunity, positioning Novo Banco to join one of Europe’s strongest financial groups,” the Portuguese lender said.
Mr Bourke was CFO of AIB from 2014 to 2019, helping lead the bank through its IPO in 2017. He moved to Novo Banco as CFO before taking the top job in 2022.
US private equity firm Lone Star owns a 75 per cent stake in Novo Banco, while Portugal’s government holds 25 per cent through entities including the country’s Resolution Fund.
An acquisition of Novo Banco by BPCE, whose units include Banque Populaire and Natixis, will help to further cross-border banking consolidation in Europe at a time when governments have been hampering such deals. Spain has been opposing the planned takeover of Banco Sabadell by BBVA, while Italy imposed a series of conditions on UniCredit’s planned purchase of Banco BPM. Meanwhile, Germany has said it’s against a potential acquisition of Commerzbank by UniCredit.
The Novo Banco deal will add to the $27 billion of acquisitions announced in the banking industry this year, according to data compiled by Bloomberg.
BPCE had emerged this week as the leading bidder to acquire Novo Banco, pulling ahead of its main rival, Spain’s CaixaBank. Lone Star had also considered the possibility of selling Novo Banco shares through an initial public offering.
Portuguese Minister for Finance Joaquim Miranda Sarmento said on May 21 that Spanish banks shouldn’t further increase their presence in the country. Spanish lenders now already represent about a third of Portugal’s banking market and that value shouldn’t increase, “due to a matter of concentration and of dependency,” he said. CaixaBank already owns Banco BPI, Portugal’s fifth-largest bank.
Novo Banco is Portugal’s fourth-biggest lender and has about €17 billion in corporate loans, €10 billion in mortgage loans and €2 billion in personal loans, according to a May 6 presentation. It has 1.7 million clients. BPCE’s Natixis has an office in the northern Portuguese city of Porto.
Novo Banco posted its first profit in 2021 and its net interest income climbed as central banks raised interest rates. The lender previously had to shed assets and sell soured debt to reduce its non-performing loan ratio, which was one of the highest in Europe after the bank emerged from the break-up of Banco Espirito Santo a decade ago.
Banco Espirito Santo, once Portugal’s biggest lender by market value, got a roughly €5 billion rescue in 2014 after regulators ordered it to raise more capital following the disclosure of potential losses on loans linked to companies in the family-controlled Espirito Santo Group. The Portuguese central bank moved the lender’s deposits and most of its assets to Novo Banco. Lone Star then agreed to inject €1 billion in Novo Banco when it bought its stake in the bank in 2017. – Bloomberg
