French bank BPCE acquires 75% of Portugal's Novo Banco from Lone Star in a €6.4B deal, marking one of Europe's largest banking transactions. Expected to close in 2026.
France's BPCE Group has announced an agreement to acquire a 75% stake in Portugal's Novo Banco from U.S. private equity firm Lone Star, marking one of Europe's most significant banking transactions in recent years. The deal values the Portuguese lender at €6.4 billion and underscores the growing consolidation trend within the financial sector.
The transaction, expected to finalize in the first half of 2026, remains contingent upon regulatory and shareholder approvals. Novo Banco CEO Mark Bourke emphasized the strategic importance of the deal, stating in a regulatory filing:
"This partnership strengthens our capacity to support Portuguese households and businesses, reinforces our dedication to the national economy, and ensures a stable, long-term future built on trust and shared objectives."
Novo Banco was established in 2014 by the Bank of Portugal as a successor institution following the collapse of Banco Espírito Santo (BES), one of the country's oldest financial institutions. The Portuguese government initially struggled to privatize the bank before Lone Star acquired its majority stake in 2017 with a €1 billion capital injection.
Despite early challenges, including legacy losses from non-performing loans, Novo Banco returned to profitability in 2021. Recent financial disclosures show robust performance, with net assets totaling €43.72 billion and a return on tangible equity of 21.7% in the first quarter of 2025.
BPCE has reportedly engaged in preliminary discussions with Portuguese authorities regarding the potential acquisition of the remaining 25% stake, currently held by the Portuguese resolution fund. This could eventually lead to full ownership, though the immediate focus remains on establishing a foothold in Portugal's retail banking market.
The French banking group's expansion into Portugal provides exposure to variable-rate lending products, which are more prevalent there than in France. The move also reflects broader industry trends, as European banks increasingly pursue cross-border mergers after years of post-crisis caution.
While Spain's CaixaBank had expressed interest in acquiring Novo Banco, concerns about excessive Spanish influence in Portugal's banking sector reportedly influenced the decision in favor of BPCE. This development aligns with a wave of consolidation across Europe, including UniCredit's growing stakes in Commerzbank and Alpha Bank, as well as BBVA's ongoing efforts to acquire Banco Sabadell.
As governments reduce their stakes in previously nationalized banks, private ownership is gaining momentum. The BPCE-Novo Banco deal exemplifies this shift, highlighting renewed confidence in cross-border banking integration.
