Published by Global Banking & Finance Review®
Posted on January 15, 2025
2 min readLast updated: January 27, 2026
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Novo Banco plans a $1.34 billion dividend payout, benefiting Lone Star and Portuguese authorities, following a lift on the dividend ban.
LISBON (Reuters) - U.S. private equity fund Lone Star and Portuguese authorities are set to share 1.3 billion euros ($1.34 billion) when Novo Banco makes its first dividend payout in the coming months.
Novo Banco was created in 2014, carved out of the collapsed Portuguese bank BES after a multi-billion-euro state bailout.
Since 2017 Novo Banco has been 75% owned by U.S. private equity Lone Star, with the Portuguese banking resolution fund and the state owning the remaining 25% stake.
Finance Minister Joaquim Miranda Sarmento said on Wednesday that "Novo Banco asked the European Central Bank for authorisation to distribute that amount of dividends" to shareholders taking into account the bank's results and its accumulated excess capital following a long ban on dividend payouts.
The bank was banned from making dividend payouts from 2017 until December 2025, but last month the three shareholders agreed to lift that ban, paving the way for a potential initial public offering this year.
It has become overcapitalised with a core Tier-1 fully loaded capital ratio of 20.7%, more than double the minimum requirement of 9.3%.
"The state as a whole - resolution fund and the Treasury - should receive more than 300 million euros in dividends in April or May, which is still a small part of what taxpayers put in the bank," the minister said.
Novo Banco lost 1.3 billion euros ($1.37 billion) in 2020, pressured by impairments still linked to assets inherited from BES, but returned to profit in the following three years.
It made a consolidated net profit of 610 million euros in the first nine months of 2024.
($1 = 0.9677 euros)
(Reporting by Sergio Goncalves. Editing by Jane Merriman)
Novo Banco is primarily owned by U.S. private equity fund Lone Star, which holds a 75% stake, while the Portuguese banking resolution fund and the state own the remaining 25%.
Novo Banco's first dividend payment of $1.34 billion marks a significant milestone after being banned from such payouts since 2017, indicating a recovery in its financial health.
Novo Banco lost 1.3 billion euros in 2020 but returned to profitability, reporting a consolidated net profit of 610 million euros in the first nine months of 2024.
The bank is expected to make its first dividend payout in April or May, following the lifting of a ban on dividend distributions.
Novo Banco has a core Tier-1 fully loaded capital ratio of 20.7%, which is significantly above the minimum requirement of 9.3%.
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