By Sergio Goncalves and Andrei Khalip
LISBON, Feb 5 (Reuters) – Novo Banco’s deliberate preliminary public providing could be helpful for the Portuguese banking sector, Financial institution of Portugal Governor Mario Centeno mentioned on Wednesday, however he urged a cautious method to any additional acquisitions or consolidation.
Novo Banco was created in 2014 on account of a authorities bailout of collapsed Banco Espirito Santo. U.S. fund Lone Star owns a 75% stake, with Portugal’s decision fund and the state holding the remaining.
Sources with data of the matter have informed Reuters that Lone Star was contemplating an IPO in addition to a full sale of Novo Banco, value about 5 billion euros ($5.21 billion), which may result in a merger with one other financial institution working in Portugal.
“I’ll see that (IPO) as a very good final result for the functioning and competitiveness of the (Portuguese) banking sector,” Centeno informed Reuters in an interview. He mentioned it could be excellent to see Portugal’s fourth-largest financial institution going public as a result of just one lender within the nation, Millennium BCP, is listed.
Portugal’s prime 5 banks already management greater than 80% of the nation’s banking belongings, however analysts see room for additional consolidation.
Centeno mentioned: “The consolidation is one theme that the market once more has to dictate”. However he urged gamers to be “cautious and cautious” in order to not jeopardise the great outcomes that Portugal’s monetary system has achieved lately when it comes to capital, liquidity and cost-to-income.
“We have to perceive what every half can obtain and what’s the objective as a result of the soundness of the sector requires the models that function in it additionally have to be steady,” he mentioned. He famous that previously, a number of M&A strikes within the sector had finally failed, an expertise not value repeating. He didn’t give extra particulars.
In June, CEO of state-owned Caixa Geral de Depositos, Paulo Macedo, mentioned his financial institution, Portugal’s largest, was contemplating “all of the hypotheses” to purchase one other lender to protect its market management within the face of growth by international banks, notably Spanish banks.
Centeno was extra cautious: “Caixa is a vital financial institution, however that additionally brings obligations. It’s a enterprise determination with systemic penalties that have to be analysed.”
The opposite main banks within the nation embody the Portuguese unit of Spain’s Santander and Banco BPI, owned by Spain’s CaixaBank.
($1 = 0.9599 euros) (Reporting by Sergio Goncalves and Andrei Khalip. Modifying by Jane Merriman)
