Possible listing of Novobanco good for stock market – regulator

The chairman of the Portuguese Securities Market Commission (CMVM) said on Monday, regarding Novo Banco’s possible listing on the stock market, that the entry of more companies is always positive for the capital market.

“It’s always positive, it’s always positive when there are more entities entering the market, but the decision to enter or not to enter is solely and exclusively up to the shareholders and those who have to make decisions about the path of each entity,” said Laginha de Sousa at the press conference in Lisbon to present the financial markets regulator’s strategy for this year.

However, the president of the CMVM didn’t want to give any more information because it concerned a specific issuer.

Still on the subject, he added that the capital market has the particularity that the entry of new companies “does not take away space from those that already exist”.

When asked if he had made the government aware of the possibility of using the capital market when privatising TAP and possibly other public companies, since one of the CMVM’s objectives is to boost this market, he said that he doesn’t publicly share what he talks about with the executive.

Novo Banco was set up in 2014 to take over part of Banco Espírito Santo’s (BES) banking business when it was wound up.

In 2017 a 75% stake in the bank was sold to a US investment fund, Lone Star. The State directly and indirectly holds a 25% stake in Novo Banco (the Resolution Fund holds 13.54% and the State holds 11.46% through the Directorate-General for Treasury and Finance).

Lone Star’s objective for the time being is to sell part of Novo Banco’s capital, and it is preparing a dispersal on the stock market (through an IPO – Initial Public Offering). It is not yet known whether the stock market listing will take place in Lisbon or whether another financial centre will be chosen.

Deutsche Bank has been hired as a consultant to advise on negotiations with potential buyers.