Novobanco’s profit accelerates 11% to €828 million in the year of its sale to BPCE

Novobanco posted a historic profit of €828 million in 2025, up 11% on the previous year. This performance was achieved despite falling margins, which were offset by commissions, public debt sales, credit recovery, additional solidarity and fewer provisions. All this in the year in which the sale of the institution to France’s BPCE was agreed for €6.4 billion, in a deal that will be closed by the end of April.

The bank refers to a payout of 60% of profits, which would mean a distribution of €496.8 million to the two shareholders, but the ongoing sale process is expected to halt the payment of dividends to Lone Star and the Portuguese State.

In the message accompanying the results, CEO Mark Bourke highlights the “decisive step forward in the process of selling the bank” to BPCE, “a structural step for the future, which will enable us to leverage scale, accelerate innovation and strengthen support for the national economy”.

“With these results and its integration, in the short term, into one of the largest European financial groups, Novobanco will reinforce its commitment to creating sustainable value for customers, employees, investors and the Portuguese economy”, he says.

Novobanco presents itself to its new French owners by pointing out that its return on equity exceeds 20% and is one of the highest among European banks.

Decline in net interest margin

With interest rates falling due to the European Central Bank’s (ECB) monetary policy easing, net interest income fell by 7% to €1.1 billion. Even so, the bank managed to offset this with a 9.5% increase in commissions to €353.6 million.

On the other hand, it also saw results from the sale of debt securities double to €42.2 million, as did other operating results, which totalled €76.9 million, which “include gains from credit recovery and tax proceedings (namely from the Additional Solidarity Contribution) and real estate results”, the bank said in a statement.

Operating costs remained virtually stable at €506.6 million. Staff costs rose by almost 6% to €286.4 million, in a year in which the workforce was reduced by 114 employees — the bank employed 4,081 people at the end of last year. It also had one fewer branch, with a network of 289 branches.

In addition, it recorded fewer impairments and provisions, which also helped to increase profits. The bank set aside €129.8 million, mainly for other assets and contingencies and almost nothing for credit, down 31.1% from the previous year.

Novobanco included a provision of €15.3 million related to the property tax introduced by the 2021 State Budget, which will be subject to change in the future in the event of a change of control. It should be noted that, because it has a shareholder based in a tax haven, the bank is subject to a more burdensome IMI regime, a situation that should change with the sale to the French group.

Credit exceeds €30 billion

In terms of activity, 2025 was also a positive year for Novobanco. It exceeded the €30 billion mark in credit granted to the economy, up 7.8% compared to 2024. Credit to companies totalled 5.1%, reaching €14.6 billion, but it was the housing segment that accelerated the most: it grew by almost 8%, reaching €11 billion.

Regarding the effects of the storms that hit the country between the end of January and mid-February, the bank says it has already approved more than 230 moratoriums for families and businesses, corresponding to a value of nearly €90 million. Exposure to the affected regions amounts to €2.5 billion.

Deposits increased by 7.6% to €32 billion, “representing 68.1% of financing for the business, reflecting customer confidence and the strength of the bank’s franchise”.

The bank closed the year with a deposit-to-loan ratio of 83.9%, up 1 percentage point from 2024. The common equity tier 1 capital ratio reached 19.9%, in line with the previous year — or 17.4% if only 40% of the net income obtained in 2025 is considered.