Portugal's Novo Banco agrees to sell Spanish retail network to Abanca

Banco Espirito Santo SA em Liquidacao

05/04/2021 15:38

LISBON, April 5 (Reuters) - Portuguese lender Novo Banco
said on Monday it has agreed to sell its retail network in Spain
to Spanish lender Abanca as part of its strategy of divesting
non-core operations and focusing on its domestic business.
    "With this agreement, Novo Banco divests its retail, private
banking and small and medium-sized enterprises (SME) operations
in Spain, including all 10 branches and employees," Novo Banco
said in a statement, without disclosing the sale price.
    "This transaction is an important milestone in Novo Banco's
strategy to divest its non-core assets and operations," it said
in a statement.
    The Lisbon-based bank - which emerged from the ruins of
Banco Espirito Santo as part of a state rescue in 2014 - has
sold its international assets in France, Asia and Cape Verde.
    In its 2020 accounts, Novo Banco booked 166 million euros
for potential losses with this sale, which was launched in May
last year.
    "The agreement represents the most suitable exit option for
the bank, while ensuring the maintenance of client service and
offering attractive long-term prospects for both clients and
employees in Spain," it said.
    The transaction is expected to have a marginal impact on
2021 net income of Novo Banco and to increase its Common Equity
Tier 1 capital ratio by 55 basis points. 
    Losses at Portugal's Novo Banco widened 25% in 2020 to 1.3
billion euros ($1.5 billion) after provisions for credit and
asset risks and the coronavirus pandemic.  urn:newsml:reuters.com:*:nL8N2LO5XL
    Novo Banco ranks as Portugal's third largest bank and is
majority-owned by U.S. private equity firm Lone Star with a 75%
stake.
    The sale is subject to the respective authorities' approvals
and closing is expected to occur in the second half of 2021.

 (Reporting by Sergio Goncalves; Editing by Ingrid Melander and
Ed Osmond)
 ((sergio.goncalves@thomsonreuters.com; +351213509204; Reuters
Messaging: sergio.goncalves.reuters.com@reuters.net))