Novo Banco SA, the lender that emerged from the breakup of Portugal’s Banco Espirito Santo SA, is in “more or less advanced” talks to sell its units in Macau, France and Cape Verde, Chief Executive Officer Eduardo Stock da Cunha said.
The Macau unit will probably be sold at a better price than the others, the CEO said in an interview at the bank’s headquarters in Lisbon. “It’s normal in these regions to pay higher market multiples than those we can get in a small operation like Cape Verde or in a European unit, where most banks are valued in the market at a discount to their book value,” Stock da Cunha said.
A planned sale of the Cape Verde unit was halted in February by the Bank of Portugal due to investigations related to that unit’s operation.
Stock da Cunha has been trimming Novo Banco’s assets and focusing on its domestic market as the Bank of Portugal makes another attempt to sell the lender after last year’s effort failed because offers were too low. The central bank said on Thursday it received four bids for Novo Banco.
Novo Banco is also trying to divest a real estate portfolio that includes stakes in restructuring funds. Sales have reached 40 million euros ($44 million) to 50 million euros a month lately, and the bank sold real estate assets in the first half at an average discount to net book value of less than 5 percent, the CEO said. It aims to sell about 700 million euros of real estate assets this year.
The separate division set up for disposals had 10.8 billion euros of assets at the end of last year and Novo Banco aims to reduce that to about 4.5 billion euros in 2020.
“It’s something that takes its time,” Stock da Cunha said. “Rome wasn’t built in a day.”