Novo Banco Asia sale unrelated to negative results

The Novo Banco Asia S.A. (Novo Banco Asia) sale agreement wasn’t due to the Macau unit’s recent negative results, it is claimed, although the process might impact its future performance, an inside source has told Business Daily.
Last week Portuguese banking group Novo Banco S.A. (Novo Banco) agreed on the sale of its Macau unit to Hong Kong incorporated brokerage firm Well Link Group Holdings Limited.
Novo Banco Asia posted losses of some MOP551,000 (US$68,965) for the second quarter of 2016, registering an accumulated MOP23.18 million in revenues and MOP23.73 million in expenses in the period between April and June of this year, as reported by Business Daily.
However, according to an inside source at the ban the deal wasn’t due to the recent negative results “since the unit has always had positive results until last year”.
“The agreement is part of the Novo Banco objective to sell a group of international units that are not part of the core business,” the source said.
Novo Banco Asia generated a total of MOP4.6 million in profits last year.
Business talks were brokered by Haitong Bank S.A. (Haitong), an investment bank from Hong Kong.
In 2015, Haitong purchased Espirito Santo Investment Bank (BESI), the investment unit of the bankrupted Portuguese bank Banco Espirito Santo (BES) – later transformed into Novo Banco.
Future impact
According to the same source, since the sale has yet to be completed or authorised no changes to the actual structure have yet been made, with any changes in the hands of future investors or owners.
The value of the purchase also has yet to be revealed and the deal is now pending approval by the Portugal Central Bank and the Monetary Authority of Macau (AMCM).
“Only if the deal is approved will the involved investors decide the business plan and business model, and the people they wish to work with,” Business Daily was told.
However, according to the source the moment the Macau unit entered into the purchase process “the [unit’s] structure was conditioned by it” and might impact its future results.
Local law firm involved in deal
Macau general law and notary MdME has collaborated with Portuguese law firm Morais Leitão, Galvão Teles, Soares da Silva (MLGTS) in consulting work for Novo Banco in the sale of its Macau unit, according to a bank release.
Portuguese firm MLGTS has created a multidisciplinary Asian Team that works directly or in close co-operation with MdME in legal support for clients with interests in Asia, especially those from Portuguese-speaking countries.
MdME has confirmed to Business Daily that it performed an “assessor” role in the deal in collaboration with MLGTS but that details of the deal and amounts involved were confidential.