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Novo Banco Loses €346 Million in Portfolio Sales

9 May 2020 – Novo Banco has continued to sell off non-strategic holdings in an effort to reduce its exposure to the assets it inherited from Banco Espírito Santo by 70%. The sales have led to series of losses reaching 346 million euros.

According to the bank’s accounts for 2019, the Nata II project – one of the largest sales ever of NPLs in Portugal – generated losses of just under 79 million euros. Novo Banco sold the €3-billion portfolio to Davidson Kempner in the last quarter of 2019. In August, Novo Banco sold the Sertorius portfolio of real estate assets to Cerberus at a loss of nearly 229 million euros. This was not the only operation in this period. The bank also sold off the Albatros project, consisting of real estate and NPLs in Spain, to Waterfall Asset Management. The sale generated an additional loss of approximately 33 million euros. In September, the bank sold the insurer, GNB Vida, to Apax at yet another loss, though this time just four million euros.

These and other losses led Novo Banco to request another €1.037 billion from Portugal’s Resolution Fund. The sales have allowed the financial institution, which is owned by Lone Star, to non-performing loan exposure to 11.8% at the end of 2019, down from 22.4% just a year before.

Next month, Novo Banco intends to finalise the sale of its Spanish asset management unit, Novo Activos Financieros España (NAFE) to Trea Asset Management, a Spanish financial asset management firm with over five billion euros in assets.

Original Story: Jornal de Negócios – Rita Atalaia

Translation/Summary: Richard D. Turner