Novo Banco targets growth in Portugal after acquisition by France's BPCE

By Sergio Goncalves

LISBON (Reuters) -Portugal's fourth-largest lender Novo Banco expects its acquisition by France's BPCE to give it "massive firepower" to grow in the Portuguese market and boost its financial strength, its CEO told Reuters on Thursday.

The French lender agreed in June to a 6.4 billion euro ($7.31 billion) deal to acquire Novo Banco, including a 75% stake held by U.S. private equity firm Lone Star.

The transaction, which should be completed during the first half of 2026, will help BPCE to expand strategically and give it a significant retail market outside France.

Novo Banco CEO Mark Bourke said the deal will give Novo the resources "to expand its presence and operational capacity" in the Portuguese market.

"Basically, they (BPCE) will give us massively more firepower" to grow, Bourke told Reuters, adding that BPCE "will increase Novo Banco's financial strength."

Novo Banco would also benefit from BPCE's strength in areas such as investment banking, asset management, trade finance, and leasing, he added.

The bank reported earlier on Thursday a 17.4% rise in first-half net profit to 434.9 million euros, despite lower ECB interest rates, as fees increased by 11% to 179 million euros.

Net interest income, a measure of earnings on loans minus deposit costs, fell 6% to 559 billion euros.

It delivered a return on tangible equity of 22.2% in June, up from 17.4% a year ago.

Bourke said the results were "very solid," with the bank on course or ahead of plan on all items.

($1 = 0.8750 euros)

(Reporting by Sergio Goncalves; editing by Andrei Khalip and Bernadette Baum)