Novo Banco
A Portuguese commercial bank created in 2014 from the healthy operations of Banco Espírito Santo and later controlled by Lone Star Funds before its acquisition by BPCE.
Last updated August 31, 2026
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Overview
Novo Banco, legally Novo Banco, S.A. and commonly styled novobanco, is a Portuguese commercial bank headquartered in Oeiras. It was created on 4 August 2014 during the resolution of Banco Espírito Santo (BES), one of Portugal's largest banks, after severe losses and the collapse of the wider Espírito Santo business group. The Bank of Portugal organized BES into a viable operating institution and a separate vehicle holding impaired and otherwise problematic exposures. Novo Banco received the healthy operating assets and liabilities, including branches, employees, customer relationships, deposits, loans and senior bondholders, while the residual institution retained much of the distressed exposure. The new bank was initially owned by Portugal's Resolution Fund, a mechanism financed by contributions from the country's banking sector and supported by state lending. Its creation was accompanied by a recapitalization of approximately €4.9 billion, with the Resolution Fund borrowing a substantial portion of the required funds from the Portuguese state. The structure was intended to preserve financial stability and continuity of banking services while separating the operating bank from the legacy problems of BES and the Espírito Santo group. Novo Banco entered a difficult transition period. Its first chief executive, Vítor Bento, left shortly after taking office and was replaced in September 2014 by Eduardo Stock da Cunha. An initial attempt to sell the bank in 2015 was abandoned after the offers were judged unsatisfactory. A later process culminated in 2017 with the sale of 75% of Novo Banco to the US private-equity firm Lone Star Funds. The Resolution Fund retained 25%, while the transaction included European Commission competition-related commitments and an asset-protection arrangement intended to support the bank's restructuring. From 2017 onward, Novo Banco concentrated on rebuilding its balance sheet and repositioning itself around domestic commercial banking. Its program included reducing non-performing and non-core assets, improving risk management and internal controls, lowering operating costs, restructuring its branch and international footprint, and focusing on Portuguese households, companies and institutional customers. The bank also divested or transferred several international activities, including its Macau operation, and sought to simplify its business model. The brand was refreshed in 2022 as part of a broader effort to modernize the bank and renew its commercial network. Novo Banco's principal activities include retail banking, business and corporate banking, lending, deposits, payments, cards, savings and investment products, wealth-related services, and selected investment-banking and institutional services. It is designated as a significant institution within the European banking framework and is supervised by the European Central Bank, with Portuguese authorities retaining important resolution and regulatory responsibilities. Novo Banco remains an important participant in Portugal's banking market, although its ownership has changed repeatedly since its formation. The bank's history is closely linked to the resolution of BES, the use of Portugal's Resolution Fund, European state-aid and competition oversight, and the subsequent clean-up of a large legacy loan portfolio. In 2025, French banking group BPCE agreed to acquire Lone Star's 75% holding and subsequently agreed to purchase the Resolution Fund's remaining 25%, subject to the applicable transaction and regulatory processes. These developments marked a further transition from a resolution-created institution toward ownership by a major European banking group.
History
Novo Banco was established on 4 August 2014 as the viable successor institution created during the resolution of Banco Espírito Santo. BES had suffered severe losses after problems spread through the Espírito Santo family's interconnected corporate network, including exposures associated with its Angolan subsidiary. Portuguese authorities separated the bank's continuing operations from impaired and disputed assets, placing the latter in a residual institution often described as the bad bank. Novo Banco received BES's branches, staff, deposits, customers, loans and senior bond obligations, allowing ordinary banking services to continue while the legacy portfolio was isolated. The new institution was initially held by Portugal's Resolution Fund. The fund had been created to support the orderly resolution of failing banks and was financed through contributions from Portuguese financial institutions, with state financing also involved. Novo Banco received a recapitalization of approximately €4.9 billion. Its creation therefore combined a banking-continuity objective with a substantial public-sector and industry-funded stabilization effort. The institution became subject to the developing European Banking Union framework and was designated a significant institution under European Central Bank supervision. Vítor Bento chaired the initial board for the 2014-2017 mandate, but he left the leadership roughly six weeks after beginning his duties. Eduardo Stock da Cunha replaced him in September 2014. Novo Banco then operated under temporary public ownership while the Resolution Fund sought a private buyer. A 2015 sale process attracted interest from several international financial groups, but it was cancelled after the offers were considered inadequate. A second sale attempt followed in 2016 and included interest from Lone Star Funds and other prospective investors. In 2017, Lone Star acquired 75% of Novo Banco in exchange for a capital injection of €1 billion, while the Resolution Fund retained the remaining 25%. The transaction was accompanied by conditions imposed through the European Commission's competition and state-aid framework. These conditions included the disposal of non-core assets, restrictions concerning impaired assets and measures intended to prevent preferential treatment by the Portuguese state. The bank also used the post-sale period to simplify its international operations, including the sale of its Macau business to Well Link Financial Group. The years after the transaction were defined by restructuring and balance-sheet repair. Novo Banco sought to reduce non-performing loans, improve credit controls, strengthen internal processes, create specialized recovery capabilities and lower its cost base. It moved toward a predominantly Portuguese commercial-banking model serving individuals and companies rather than maintaining a broad international footprint. The strategy also involved disposing of non-core holdings and renewing the branch and customer-service network. The bank introduced a new brand identity in 2022, presenting the change as part of its modernization and commercial renewal. It continued to offer retail, corporate, business and institutional banking, alongside deposits, lending, payments, cards and investment-related services. Its later history also included legal and regulatory controversy, including a 2023 order concerning frozen Venezuelan assets, as well as the winding down of its contingent capital or asset-protection arrangement. In December 2024, Novo Banco announced the early closure of that arrangement, which removed a contractual dividend restriction and supported plans to normalize its capital structure. Ownership changed again in 2025 when BPCE agreed to acquire Lone Star's 75% interest and later signed an agreement to purchase the Resolution Fund's remaining 25%. If completed, the transactions would move Novo Banco from a resolution-created institution with mixed private and public ownership into a wholly owned subsidiary of a major French banking group. The bank's development thus reflects three distinct phases: the emergency separation from BES, the Lone Star restructuring period, and the proposed integration into BPCE's European banking platform.
- 2025
BPCE agrees to acquire Novo Banco
[1]BPCE agrees to acquire Lone Star's 75% stake and subsequently signs an agreement for the Resolution Fund's remaining 25% stake.
- 2024
Contingent capital arrangement ends early
[1]The bank closes the asset-protection arrangement linked to the Lone Star acquisition before its scheduled maturity.
- 2023
Bank of the Year in Portugal
[1]The Banker names Novo Banco Bank of the Year in Portugal.
- 2022
Brand refresh
[1]Novo Banco launches a refreshed identity while modernizing its commercial presence.
- 2017
Lone Star becomes majority owner
[1]Lone Star acquires 75% of the bank and commits new capital; the Resolution Fund retains 25%.
- 2017
Macau operation changes ownership
[1]Well Link Financial Group acquires Novo Banco's Macau unit, which is later renamed Well Link Bank.
- 2016
Restructuring plan announced
[1]Novo Banco plans workforce and operating-cost reductions while authorities continue searching for a private investor.
- 2015
First sale attempt is cancelled
[1]The Resolution Fund abandons the initial sale process after receiving offers that it considered unsatisfactory.
- 2014
Novo Banco is established
[1]The Bank of Portugal creates Novo Banco on 4 August as the viable operating bank emerging from Banco Espírito Santo's resolution.
- 2014
Initial leadership changes
[1]Vítor Bento leaves the bank's leadership soon after taking office, and Eduardo Stock da Cunha becomes chief executive in September.
Products and positioning
A major Portuguese domestic commercial bank focused on individuals, companies and institutional customers, with a post-resolution strategy centered on balance-sheet repair and core banking.
Retail banking · 2014
Personal banking
Services for individual customers, including transaction accounts, deposits, payment cards, digital and branch banking, personal loans and household financial services. This business formed part of the viable customer-facing activity transferred from Banco Espírito Santo and remains central to Novo Banco's domestic commercial model.
Lending · 2014
Mortgage and consumer lending
Credit products for households, including home finance and consumer borrowing. Lending is provided within the bank's broader retail proposition and is managed alongside credit-risk controls developed during the post-resolution balance-sheet restructuring.
Commercial banking · 2014
Business and corporate banking
Banking for small businesses, medium-sized companies and larger corporate customers. Services include operating accounts, deposits, working-capital facilities, investment lending, payments and other financing solutions. After 2017, this area became a primary focus as the bank concentrated on Portuguese companies and reduced non-core activity.
Wealth and investment · 2014
Savings and investment services
Savings, investment and wealth-related services for personal, corporate and institutional customers. The offering complements deposit-taking and lending and forms part of the bank's full-service commercial relationship model.
Institutional banking · 2014
Institutional and investment banking
Services for institutional clients and selected capital-markets or investment-banking activities. Novo Banco's post-restructuring strategy placed greater emphasis on core domestic commercial banking while retaining capabilities needed by larger companies and institutional customers.
Controversies
2023
Venezuelan frozen-asset dispute
Novo Banco was reported to have been ordered to return approximately $1.5 billion in frozen assets to the Venezuelan government. The matter involved contested control and release of sovereign-linked funds and became one of the bank's prominent legal and regulatory disputes.
Marketing campaigns
- 2022Novo Banco brand refresh
Portugal
The bank refreshed its brand as part of a modernization effort involving its commercial network and customer-facing presence.
Outcome. The refresh supported the bank's repositioning as a modern domestic commercial institution after several years of restructuring.
- 2014First Novo Banco communication and identity campaign
Portugal
Novo Banco introduced its first public communication program after the BES resolution. Its butterfly motif represented transformation, while the visual identity was rolled out progressively across branches.
Outcome. The campaign established the new bank's post-BES identity and separated its customer-facing image from Banco Espírito Santo.
Brand decisions
2025
Transfer ownership to BPCEM&ABackground
After the Lone Star restructuring period, a major European banking group sought to acquire Novo Banco's mixed private and public ownership interests.
Action taken
BPCE agreed to acquire Lone Star's 75% stake and later signed an agreement concerning the Resolution Fund's remaining 25% stake.
Aftermath
Completion would make BPCE the sole owner of Novo Banco and could place the Portuguese bank within BPCE's broader European banking strategy.
Reported valuation for 100% of Novo Banco. €6.4 billion (2025 acquisition announcement)
2024
End the contingent capital protection arrangement earlyStrategyBackground
Novo Banco had received an asset-protection or contingent-capital arrangement as part of the Lone Star acquisition, with a contractual maturity scheduled for December 2025.
Action taken
The bank closed the arrangement in December 2024, ahead of maturity, and stated that it would work toward normalizing its capital structure.
Aftermath
The early termination removed a contractual dividend restriction and was presented as supporting a possible future public offering and a more conventional ownership and capital structure.
2017
Sell a 75% stake to Lone StarM&ABackground
Following the failed 2015 process and a further round of bids, authorities sought a buyer able to recapitalize and restructure the bank.
Action taken
Lone Star Funds acquired 75% of Novo Banco and committed a capital injection, while the Resolution Fund kept 25%.
Aftermath
The bank entered a multi-year restructuring focused on asset quality, cost reduction, operational efficiency and concentration on Portuguese commercial banking.
Lone Star capital injection. €1 billion (2017 transaction)
2017
Divest non-core international activityStrategyBackground
The post-acquisition restructuring plan required Novo Banco to simplify its operations and focus on its domestic commercial franchise.
Action taken
The bank sold its Macau unit to Well Link Financial Group, which subsequently renamed the business Well Link Bank, and pursued broader reductions in non-core activity.
Aftermath
The transaction supported the bank's move away from a broad international footprint and toward a Portugal-centered operating model.
2015
Cancel the initial sale processM&ABackground
The Resolution Fund sought to transfer ownership of Novo Banco to a private investor after the bank's creation.
Action taken
Authorities cancelled the first sale attempt after determining that the submitted offers were not satisfactory.
Aftermath
Novo Banco remained under Resolution Fund ownership while a new privatization process was prepared.
2014
Separate viable banking operations from BES legacy assetsStrategyBackground
Banco Espírito Santo suffered historic losses and became unable to continue as a normal operating bank. Portuguese authorities needed to preserve deposits, branches, employees and customer services while isolating impaired exposures.
Action taken
The Bank of Portugal established Novo Banco as the continuing institution and transferred the healthier operating assets and liabilities to it, leaving troubled exposures in a separate residual structure.
Aftermath
Novo Banco became a functioning bank but inherited a complex resolution history, public-sector support arrangements and a substantial balance-sheet clean-up requirement.
Initial recapitalization. Approximately €4.9 billion (2014)
Recent events
- 2025
BPCE agrees to acquire Lone Star's Novo Banco stake[1]
M&A
French banking group BPCE agreed to acquire Lone Star's 75% holding in Novo Banco, subject to applicable approvals and transaction conditions.
- 2025
BPCE agrees to acquire the Resolution Fund's remaining stake[1]
M&A
BPCE later signed an agreement concerning the acquisition of the remaining 25% interest held by Portugal's Resolution Fund, which would give it full ownership if completed.
- 2024
Novo Banco ends its contingent capital protection arrangement early[1]
Other
The bank closed the asset-protection scheme associated with Lone Star's acquisition ahead of its contractual maturity and stated that it intended to normalize its capital structure.
- 2023
Novo Banco receives Bank of the Year in Portugal recognition[1]
Other
The Banker recognized Novo Banco as Bank of the Year in Portugal.
- 2023
Venezuelan frozen-asset dispute reaches an order against Novo Banco[1]
Lawsuit · Regulation · Other
Novo Banco was reported to have been ordered to return approximately $1.5 billion in frozen assets to the Venezuelan government.
- 2022
Novo Banco launches a new brand identity[1]
Campaign · Other
The bank introduced a refreshed brand as part of its modernization program and investment in its commercial network.
- 2017
Lone Star acquires majority control of Novo Banco[1]
M&A
Lone Star Funds acquired 75% of Novo Banco after a competitive sale process, while Portugal's Resolution Fund retained a 25% interest.
- 2017
Novo Banco's Macau unit is sold and renamed Well Link Bank[1]
M&A
A unit of Novo Banco in Macau was acquired by Well Link Financial Group and subsequently operated under the Well Link Bank name.
- 2016
Novo Banco announces major restructuring and job reductions[1]
Other
The bank announced plans to reduce its workforce and operating costs as part of a restructuring plan agreed in the context of its resolution and prospective sale.
- 2015
Initial Novo Banco sale process is cancelled[1]
M&A · Other
A proposed sale process involving several international financial groups was abandoned after the offers were considered unsatisfactory.
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