Novo Banco will suffer more cuts. Sale will be concluded in November
The Finance State Secretary disclosed the calendar for the negotiations concerning Novo Banco in the Portuguese Parliament.
Novo Banco’s sale should be concluded during the month of November. Right now, the size of the restructuring of the bank is still being discussed with the buyer, Lone Star, and the resolution authority, in order to find the best way to make NB a viable financial institution. The news were disclosed by the State secretary for Finance Ricardo Mourinho Félix in Parliament.
Mourinho Félix was clear: “If [Novo Banco] is not viable, it cannot be authorized to operate and the investor will not be interested”. His answer followed questions about the size of the restructure and the cuts the bank will suffer, in order for DGComp and the Single Supervisory Mechanism (SSM) to approve the operation.
"The business plan involves restructuring Novo Banco (…) If the bank is not viable, it cannot be authorized to operate and the investor will not be interested.”
Mourinho Félix explained the bond exchange is being prepared and that once it is concluded, and “once the business plan is completed and accepted by DGComp and SSM, the process can be finished”. After that, the State Secretary acknowledged the business plan “involves a restructuring of the bank to make it viable”. He also stated that “the size of the restructuring is still being discussed, namely with the buyer and the resolution authority”.
Mourinho Félix further disclosed the calendar which was given to authorities: “The bond exchange should be concluded during the summer, so that the sale is completed during the month of November”.
The voluntary bond exchange aims to reinforce Novo Banco’s capital in 500 million euros, and is one of the key conditions for the sale to the North-American fund Lone Star to be concluded.
