Mark Bourke, the Irish-born CEO of Novo Banco, a Portuguese bank, announced recent progress towards the company’s scheduled public listing early next year. Bourke, formerly the chief financial officer of AIB, joined Novo Banco in 2019 and said that all three shareholders appear to agree on ending the ban on dividend payouts by the bank. Lifting this restriction would enable Novo Banco, rescued by the Lisbon government during the financial crisis, to dispense their surplus capital and commence an initial public offering (IPO).
Novo Banco, a 75% acquisition by the US-based private equity titan, Lone Star, since 2017, formed from the wreckage of Banco Espirito Santo after the bank’s collapse in 2014. The Portuguese government and a domestic banking resolution fund primarily hold the rest. Restrictions were in place on Novo Banco for making dividend disbursements until December 2025, created when Lone Star purchased it in 2017.
Nonetheless, Bourke shared with Reuters an emerging consensus between Lone Star, the Portuguese resolution fund, and the state, considering the advantages of abolishing the dividend block. “This dialogue must proceed… if everyone aligns quickly, a regulatory dialogue would follow on removing surplus capital,” Bourke noted.
The country’s fourth-largest lender, Novo Banco, is overcapitalised by a core Tier-1 fully loaded capital ratio – a measure of equity buffers concerning risk-adjusted assets – registering at 19.9 per cent, significantly surpassing the obligatory minimum of 9.3 per cent, given the limits on distributing dividends.
Mr. Bourke pointed out that the bank could potentially initiate its IPO early next year, given that it has all the necessary prerequisites and regulatory consent to extract surplus capital. He highlighted that the enterprise has been primed for this move for the past year, with the balance sheet projected to be prepared in due course.
Mr. Bourke played a crucial role in readying AIB for its initial €3.4 billion public offering in 2017.
On Thursday, reports confirmed that Novo Banco saw a slight dip in its net profit for the first half of the year, a fall of 0.8% to €370.3 million compared to the previous year. However, it wasn’t all grim as there was an increase in net interest income and fees and commissions by 10.9% to €161.2 million. This growth was largely neutralised as the bank ramped up its provisions for loan losses and allocated funds for investment purposes.
The bank announced a rise of 1.1% in the total of customer loans since the end of last year, totalling €28.5 billion. Reuters provided additional coverage on this matter.