Portugal: Novo Banco sees €137.7 mln H1 2021 profit compared to €555.3 mln loss YoY

Novo Banco made profits of €137.7 million in the first half of the year, which compares with losses of €555.3 million in the same period of 2020, the bank disclosed on Monday.

This is the first time that Novo Banco has posted positive half-year results (it had already posted profits in the first quarter), which according to the results presentation “demonstrates the business’ ability to generate capital”.

Novo Banco was born on August 3, 2014 (turns seven years old this Tuesday) in the resolution of Banco Espírito Santo (BES).

In 2017, the Portuguese state agreed to sell 75% of the bank to US investment fund Lone Star. Then, a contingent capitalisation mechanism was created whereby the Resolution Fund committed to, until 2026, cover losses with ‘toxic’ assets that Novo Banco was left with from BES up to €3.89 billion.

Novo Banco has so far consumed 3.293 billion euros of public money under this capitalisation mechanism, with 112 million euros still pending further investigation by the Resolution Fund.