Novobanco prepares ‘restructuring and sales’ to lower NPLs

  • ECO News
  • 4 October 2022

Mark Bourke aims to reduce the ratio of non-performing loans (NPLs) by combining "restructuring and sales". Ramalho's successor wants to "get the bank in good shape", while Lone Star seeks a buyer.

The 5% target for non-performing loans (NPL) set by Novobanco this year is “very close”, according to the new CEO, Mark Bourke, who plans to reduce the ratio to between 3% and 4% “in two to three years,” through a “combination of individual restructuring and portfolio sales.”

The statements by António Ramalho’s successor came in an interview with Bloomberg TV on Tuesday. On June 30, at the end of H1, the non-performing loan (NPL) ratio was 5.4% (i.e. down from 5.7% in December 2021 and 7.3% at the end of the first six months of last year).

Asked about the impacts of the current environment on this indicator, the CEO said he does not see “a significant uptick in stress or formation of NPLs” – which, if it happened, would be “shared across all banks”.

Another of the missions facing the Irish manager is to prepare for the bank’s sale. Lone Star employed €1 billion in Novobanco to take a 75% stake in 2017 and intends to recover the money invested. The Resolution Fund and the Portuguese government are interested parties due to the 23.4% and 1.6% stakes they also hold in the financial institution.

Do you follow up on contacts of American shareholders, being a private equity firm, with potential buyers? “No, absolutely not,” replied Mark Bourke in the same interview. “From our point of view, the important thing is to be independent, sustainable and competitive because that is what makes it possible for us to take our destiny into our own hands,” he added.