BPCE does not foresee extraordinary dividend distribution of Novo Banco

“ Nwe do not predict,” Nicolas Namias said in a conversation with a group of Portuguese journalists visiting the headquarters of the French BPCE group in Paris.

“ It is not a matter of BPCE taking the capital of 2025, we paid for that capital,” added Namias, explaining that the price paid by Novo Banco was 6,700 million euros because it already included that value or would have been lower.

In the agreement for the sale of Novo Banco to the French BPCE it was agreed that the investment fund Lone Star and the Portuguese State (the shareholders of Novo Banco who sold their positions) would not receive the dividends for 2025 and would remain in Novo Banco, i.e. belonged to the new shareholder (BPCE).

In 2025, Novo Banco had a historic profit of EUR 828 million, and therefore for the dividend distribution policy it could pay about EUR 500 million.

At the March General Assembly, in the proposal for distribution of results, the non-distribution of dividends point was approved, passing most of the profit to carried over results (a small part was in legal reserve, mandatory by law).

As dividends remained in the bank, they became part of the French group in carrying out the purchase (in April), so they could make an extraordinary payment of dividends, appropriating the amount they considered appropriate.

According to Nicolas Namias, this distribution is not foreseen and the goal for Novo Banco is to grow in business.

“The first goal is to ensure that the bank has capital to grow in its activities,” he said.

Novo Banco was created in 2014 to take part in Banco Espírito Santo's banking activity (BES) when, in August of that year, BES was the subject of a resolution measure in the face of the serious crisis in which it was immersed.

In 2017, the majority of the Novo Banco (75%) was sold to the U.S. fund Lone Star, with the Portuguese State with 25%.

It was known that Lone Star's goal was to get the bank to profit quickly to sell it in the medium term with added value, which happened at the end of April by 6,700 million euros.

Lone Star fit in about EUR 5,000 million (which was added to past dividends) and the Portuguese State EUR 1,673 million (which added to the dividends already received allowed the public coffers to recover some EUR 2,000 million injected into the bank).

According to calculations made by Lusa, the resolution of BES has so far cost about EUR 8,000 million to the public coffers (mostly the result of the initial capitalisation of Novo Banco and the recapitalisations made by the Resolution Fund).

The Banque Populaire Caisse d’Epargne (BPCE) is the second largest banking group in France and the fourth largest in the euro area.

Before buying Novo Banco, it already operated in Portugal in consumer credit and investment bank (detains Natixis' technological center in Porto, with about 2,500 employees) but the purchase of Novo Banco marked the entry into the retail banking in Portugal.

According to BPCE, the purchase of Novo Banco was “the largest cross-border bank acquisition in the euro area in more than ten years.