BPCE Acquires Portugal’s novobanco for $7.38 Billion

Groupe BPCE, the second-largest bank in France, and the fourth-largest in Europe, on Friday said that it has signed a Memorandum of Understanding (MOU) for the acquisition of a 75% equity interest in novobanco from the private equity firm Lone Star Funds.

The transaction, representing a cash amount of approximately $7.38 billion (for 100% of the shares) and a multiple of around 9x annual earnings, is the biggest cross-border acquisition in the euro zone for more than 10 years.

Following the creation of BPCE Equipment Solutions at the start of the year, this acquisition marks a new key stage in the execution of the “Vision 2030” strategic plan, geared to developing and diversifying BPCE in France, Europe and the wider world. On completion of the transaction, Portugal would become the Group’s second-largest domestic retail market.

Novobanco, Portugal’s fourth-largest bank, has built up a solid franchise and holds market shares of 9% with individual customers and 14% with corporate clients. It has 1.7 million individual customers and manages $19.61 billion corporate loan book. With its 4,200 employees, novobanco operates through some 290 branches and an extensive network of external partners, while also offering a rich customer experience through its digital channels.

Europe’s Most Profitable Bank

In recent years, novobanco has become one of the most profitable banks in Europe, posting a cost-income ratio under 35% and a return on tangible equity (RoTE) exceeding 20%. These results have been underpinned by the quality of novobanco’s teams, together with the engagement of its shareholders for the last eight years, BPCE said.

By welcoming novobanco into the Group, alongside the Banque Populaire and Caisse d’Epargne banking networks, which already serve the French economy, BPCE would further strengthen its role as an important development partner for the Portuguese economy, recognised for its solid fundamentals and resilience.

Through the transaction, BPCE intends to facilitate financing for local companies and individuals’ projects, while also expanding the range of services offered to Portuguese customers. BPCE will leverage all of its expertise to strengthen value creation in close collaboration with novobanco.

Execution of Vision 2030

The acquisition of novobanco would help diversify BPCE in two respects: geographically, via access to a dynamic economy, and in balance sheet terms, by increasing the proportion of variable rate loans on its balance sheet, thus improving its revenue profile.

The acquisition would be a growth driver for the whole Group and is perfectly consistent with BPCE’s “Vision 2030” strategy, underlining the Group’s determination to expand in France, Europe and the wider world through strategic investments that create lasting value.

The transaction marks a new key stage in the Group’s European-scale growth, following the creation of BPCE Equipment Solutions in February 2025 and the ongoing project to create the leading European asset manager in partnership with Generali. On completion of the transaction, Groupe BPCE’s CET1 ratio would remain above 15%.

Timing of Transaction

BPCE is engaging in discussions with the Portuguese government and the Portuguese Banking Resolution Fund with a view to acquiring their equity interests in novobanco (11.5% and 13.5%, respectively), on identical terms. 

BPCE will proceed with the necessary consultations with employee representative bodies in order to sign the acquisition contract. The project is projected for completion in the first half of 2026.

BPCE CEO Nicolas Namias said that holding market shares of 9% with individual customers and 14% with corporate clients, novobanco possesses excellent fundamentals, strong growth potential and an already high level of profitability.

BPCE, which is a major player in local banking in France thanks to the Banque Populaire and Caisse d’Epargne banking networks, would become a retail banking player in Europe with the acquisition of novobanco and would actively participate in financing the Portuguese economy.