BY Fraser Tennant
In a deal that values Portugal’s fourth-largest lender at $7.4bn, global private equity firm Lone Star has sold its 75 percent stake in Novo Banco to French banking group BPCE.
The acquisition comes amid a wave of cross-border and domestic banking mergers in Europe, where regulators have long urged industry consolidation to better integrate the financial sector and counter growing competition from US banking giants.
The transaction is the biggest cross-border acquisition in the eurozone for more than 10 years.
By welcoming Novo Banco into the group, alongside the Banque Populaire and Caisse d’Epargne banking networks, which already serve the French economy, BPCE will further strengthen its role as an important development partner for the Portuguese economy, recognised for its solid fundamentals and resilience.
Through the transaction, BPCE intends to facilitate financing for local companies and individuals’ projects, while also expanding the range of services offered to Portuguese customers. BPCE will leverage all of its expertise to strengthen value creation in close collaboration with Novo Banco.
“This agreement marks a defining moment in Novo Banco’s journey and a powerful endorsement of the transformation we have achieved,” said Mark Bourke, chief executive of Novo Banco. “By becoming part of BPCE, Novo Banco now can access the strength and depth of one of Europe’s financial powerhouses.”
Portugal’s fourth-largest bank with 290 branches and 4200 employees, in recent years Novo Banco has become one of the most profitable banks in Europe, posting a cost-income ratio under 35 percent and a return on tangible equity exceeding 20 percent. These results have been underpinned by the quality of Novo Banco’s teams, together with the engagement of its shareholders for the last eight years.
Currently employing over 3000 staff in Portugal, the opening of a multi-business centre of expertise in Porto in 2017 has deepened BPCE’s local ties. “Novo Banco possesses excellent fundamentals, strong growth potential and an already high level of profitability,” said Nicolas Namias, chief executive of BPCE. “The financial terms of the transaction reflect a disciplined and stringent valuation approach, as well as our confidence in Novo Banco’s ability to create value over time.”
The acquisition is expected to be completed in the first half of 2026.
“This transaction enhances our ability to serve Portuguese families and businesses, deepens our commitment to the national economy, and secures a long-term future built on strength, trust and shared ambition,” concluded Mr Bourke. “It is a great moment for Novo Banco, and we now move forward with renewed confidence and clarity of purpose.”
News: France's BPCE agrees deal to buy Portugal's Novo Banco for $7.4 billion