By Patricia Knowsmann 
 

LISBON--Novo Banco SA, the lender carved out of the "good assets" of collapsed bank Banco Espirito Santo SA, said Monday deposits have risen by over 2 billion euros ($2.4 billion) in the five months to Dec. 31, and while loans fell, bad debt rose.

In its result for the months between Aug. 4 and Dec. 31, Novo Banco reported gross loans fell to EUR40 billion from EUR41.6 billion. Credit at risk of default, meanwhile, rose to 16.5% from 13.5%.

As loans fell and deposits rose, the bank's loan-to-deposit ratio fell to 126%, compared with 155% in September.

Novo Banco, which is up for sale, also said it has fully reimbursed the loan tapped under the European Central Bank's emergency liquidity assistance program.

The bank reported a common equity tier 1 ratio of 9.6% at December.

For the period, the bank reported a EUR468 million loss, after being hit by EUR699 million in provisions. Those provisions included EUR378 million for credit.

Novo Banco kept the "good" assets, including loans and deposits, of Banco Espirito Santo, which had to be broken up and bailed out in August following heavy losses from its exposure to its troubled parent.

Under the bailout, Novo Banco received a capital injection of EUR4.9 from a domestic resolution fund, which included money from both the state and other domestic banks. The plan is to sell the lender so the fund can get its money back.

Novo Banco Chief Executive Eduardo Stock da Cunha said Monday at a press conference, he "honestly doesn't know" how much the bank is worth.

Over a dozen parties have shown interest in the lender, including Portugal's Banco BPI SA, Spain's Banco Santander SA, China's Fosun International Ltd. and U.S. private-equity firm Apollo Global Management LLC.

Write to Patricia Knowsmann at Patricia.Knowsmann@wsj.com

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