Novo Banco before first dividend payout: billion-dollar stake for Lone Star and Portuguese authorities

The financial world is closely watching the upcoming dividend payout from Novo Banco, expected in the coming months, which foresees a distribution of 1.3 billion euros. The American private equity fund Lone Star and the Portuguese authorities will benefit from this. Novo Banco was established in 2014 as a rescue measure for the collapsed Portuguese bank BES, which was dismantled after receiving billions in state aid. Since 2017, Lone Star holds 75% of the shares, while the Portuguese bank restructuring fund and the state hold the remaining 25%. Finance Minister Joaquim Miranda Sarmento announced that Novo Banco has asked the European Central Bank for approval to distribute dividends. This is planned in light of the results and the excess capital that the bank has accumulated over recent years. The bank's dividend policy had been suspended from 2017 to the end of 2025 but was recently relaxed, also favoring a possible stock market launch this year. The overcapitalization is reflected in a core capital ratio (CET1) of an impressive 20.7%, well above the minimum standard of 9.3%. In April or May, the restructuring fund and the finance ministry expect more than 300 million euros in dividends, which, however, represents only a fraction of the amounts originally invested by taxpayers. After a loss of 1.3 billion euros in 2020, when the bank was still dealing with legacy issues from BES, Novo Banco was able to operate profitably again in the following three years. A consolidated net profit of 610 million euros was achieved in the first nine months of 2024 alone.