**Spanish Banks’ Expansion in Portugal Faces Government Pushback**
Portugal’s government has expressed concerns over the increasing presence of Spanish banks in its financial market, urging that their market share should not grow further. Finance Minister Joaquim Miranda Sarmento highlighted in a recent interview with RTP3 that Spanish lenders currently account for approximately one-third of Portugal’s banking sector. He emphasized the importance of avoiding excessive concentration and dependency on banks from a single country, specifically Spain.
Novo Banco SA, a Portuguese bank primarily owned by US private equity firm Lone Star, is reportedly preparing for a potential initial public offering (IPO). Bloomberg News previously indicated that CaixaBank SA, a Spanish bank, is among the interested parties considering an acquisition of Novo Banco. As Portugal’s fourth-largest lender, Novo Banco returned to profitability in 2021, benefiting from rising net interest income as central banks increased interest rates. The bank had previously faced challenges, including a high non-performing loan ratio, which it addressed by divesting assets and selling distressed debt following the collapse of Banco Espirito Santo SA a decade ago.
Sarmento stated that the decision regarding Novo Banco’s future lies with Lone Star. If the firm opts to sell, it will open the process to market offers from potential buyers. Currently, Spanish banks such as Banco Santander SA and CaixaBank are among the top five banks operating in Portugal. Sarmento reiterated the need for a balanced banking sector, cautioning against over-reliance on any single country’s financial institutions.
Lone Star holds a 75% stake in Novo Banco, while the Portuguese government retains a 25% interest through various entities, including the Resolution Fund managed by the Bank of Portugal. Novo Banco’s CEO, Mark Bourke, mentioned that the bank is making significant progress on its IPO prospectus, aiming for a launch as early as June. Sarmento noted that Lone Star intends to sell a 25% to 30% stake in the IPO.
The finance minister also clarified that the government would not interfere if state-owned Caixa Geral de Depositos SA chooses to explore the possibility of acquiring Novo Banco. Caixa Geral de Depositos CEO Paulo Macedo confirmed that his bank is evaluating the potential acquisition, while Banco Comercial Portugues SA’s CEO Miguel Maya indicated that his bank would consider transactions related to Novo Banco if approached.
In summary, the Portuguese government is advocating for a diversified banking sector, while significant developments regarding Novo Banco’s ownership and potential IPO are on the horizon.
**FAQ**
*What is the current market share of Spanish banks in Portugal?*
Spanish banks currently represent about one-third of Portugal’s banking market, prompting concerns from the Portuguese government about excessive concentration and dependency.
