Portugal sounds out Spanish banks on Novo Banco sale: sources
By Jesús Aguado
MADRID (Reuters) - Portugal has begun sounding out Spanish banks on their interest in buying Novo Banco, the successor to the state-rescued Banco Espirito Santo (BES), several sources familiar with the talks said on Tuesday.
Spain's mid-sized Sabadell (SABE.MC: Quote) and Popular POP.MC, which already have offices and interests in neighbouring Portugal, were among those approached by the Bank of Portugal, the sources said.
"For now there is no formal sales process, nor is it clear exactly how much of Novo Banco is up for sale, though it's estimated to be about 70 billion euros ($88 billion) worth of assets," one of the sources said, on condition of anonymity.
Popular would be open to analyzing a potential acquisition of Novo Banco, depending on the conditions, another source close to the discussions said. But talks around a disposal were still very preliminary, the person added.
Spanish banks are unlikely to be embarking on any purchases before the results of Europe-wide health checks are unveiled at the end of October, while the sources added that a formal sales process around Novo Banco may only start at year-end.
The Bank of Portugal was not immediately available for comment, while Popular and Sabadell declined to comment on the talks, first reported by Spanish newspapers Cinco Dias and Expansion on Tuesday.
Portugal's government has made it clear it wants a speedy sale of Novo Banco, saying two weeks ago a disposal was needed to avoid further risks. The franchise was dealt an early blow when three managers tasked with its turnaround resigned earlier this month.
Portugal also wants to try and recover 4.9 billion euros of aid, mostly public funds, poured into the lender in August. Continued...