Novo Banco owners will get $1.34 billion when the bank pays its first dividend

LISBON (Reuters) – U.S. private equity fund Lone Star and Portuguese authorities are set to share 1.3 billion euros ($1.34 billion) when Novo Banco pays its first dividend in the coming months.

Novo Banco It was created in 2014 and was carved out of the failed Portuguese bank BES after a multi-billion euro government loan.

As of 2017, Novo Banco is 75% owned by US private equity firm Lone Star, with the Portuguese bank resolution fund and the state holding the remaining 25%.

Finance Minister Joaquim Miranda Sarmento said on Wednesday that “Novo Banco has requested the approval of the European Central Bank for its shareholders, taking into account the bank’s results and accumulated surplus capital.”

The bank was banned from paying dividends from 2017 until December 2025, but last month its three shareholders agreed to lift the ban, paving the way for an initial public offering this year.

It is over-capitalised with a fully loaded capital ratio of 20.7% from core tier-1, which is more than double the minimum requirement of 9.3%.

“The state as a whole – the resolution fund and the treasury – should have a profit of more than 300 million euros in April or May, which is still a small part of what the taxpayers put in the bank,” said the minister.

Novo Banco It lost 1.3 billion euros ($1.37 billion) in 2020, still under pressure from impairments related to assets inherited from BES, but returned to profit in the next three years.

It generated a net profit of 610 million euros in the first nine months of 2024.

($1 = 0.9677 EUR)

(Reporting by Sergio Goncalves. Editing by Jane Merriman)