By Sergio Goncalves and Andrei Khalip
LISBON, Feb 5 (Reuters) – Novo Banco’s deliberate preliminary public providing can be useful 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 because 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, price 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 an excellent consequence for the functioning and competitiveness of the (Portuguese) banking sector,” Centeno informed Reuters in an interview. He mentioned it will 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 nice outcomes that Portugal’s monetary system has achieved in recent times when it comes to capital, liquidity and cost-to-income.
“We have to perceive what every half can obtain and what’s the purpose as a result of the steadiness of the sector requires the items that function in it additionally should be secure,” he mentioned. He famous that previously, a number of M&A strikes within the sector had finally failed, an expertise not price 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 overseas banks, significantly Spanish banks.
Centeno was extra cautious: “Caixa is an important financial institution, however that additionally brings duties. It’s a enterprise choice with systemic penalties that have to be analysed.”
The opposite main banks within the nation embrace 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)
