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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