Lone Star Funds, today announced that it has signed a Memorandum of Understanding for the sale of Novo Banco, S.A., Portugal’s fourth-largest bank, to BPCE, a leading European banking institution, for a cash consideration payable at closing which values 100% of the share capital at an estimated €6.4 billion as of end 2025.

This transaction marks the culmination of a multi-year transformation of novobanco since Lone Star acquired 75% of the bank in 2017. Under Lone Star’s stewardship, in cooperation with other shareholders, novobanco has undergone a comprehensive turn-around, establishing itself as one of the most profitable banks in Europe, with a target return on tangible equity (RoTE) exceeding 20%.

The bank has significantly de-risked its balance sheet, reducing non-performing loans to de minimis levels, and has made substantial investments in digital transformation and customer experience. Throughout this period, novobanco has strengthened its role as a trusted partner for Portuguese households and successfully positioned itself as a preferred bank for SMEs across Portugal.

Donald Quintin, Chief Executive Officer of Lone Star commented:

“We are proud to have supported novobanco’s transformation to become one of Europe’s leading and most profitable financial institutions. The bank has undergone a comprehensive transformation over the last eight years, becoming a trusted partner for Portuguese households and businesses across the country. BPCE shares our ambition for novobanco and is well positioned to take the bank forward as it continues to deliver for customers, SMEs and the Portuguese economy as a whole.”

Nicolas Namias, Chief Executive Officer of BPCE, stated:

“Novobanco possesses excellent fundamentals, strong growth potential and an already high level of profitability. For its part, BPCE is a major banking player in France notably thanks to the Banque Populaire and Caisse d’Epargne banking networks.

With the acquisition of novobanco, BPCE would become a retail banking player in Europe and would actively participate in financing the Portuguese economy. The projected transaction marks a key stage in the execution of its “Vision 2030” strategic plan, announced close to a year ago.

BPCE’s executive managers and employees are all particularly enthusiastic about the prospect of welcoming novobanco, its management and its 4,200 employees, in order to write a new chapter of growth, innovation and performance in Europe together."

Kambiz Nourbakhsh, Senior Managing Director at Lone Star Funds, added:

“This agreement marks a defining moment in the transformation of novobanco and is a testament to the extraordinary efforts of its leadership and employees over the last eight years. In BPCE, we have found a new owner for novobanco that has the experience and vision to build on its strong foundations and support the bank as it delivers on its long-term growth strategy.”

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