Bpce: BPCE signs a Memorandum of Understanding to acquire novobanco, Portugal’s fourth-largest bank

Core Viewpoint - Groupe BPCE has signed a Memorandum of Understanding to acquire a 75% equity interest in novobanco, marking a significant cross-border acquisition in the euro zone valued at approximately €6.4 billion, representing a multiple of around 9x annual earnings [1][2][10] Group 1: Acquisition Details - The acquisition of novobanco is part of BPCE's "Vision 2030" strategic plan aimed at expanding and diversifying its operations in France, Europe, and globally [2][7] - Upon completion, Portugal will become BPCE's second-largest domestic retail market [2] - BPCE is in discussions to acquire additional equity interests from the Portuguese government and the Portuguese Banking Resolution Fund [8] Group 2: Novobanco's Performance - Novobanco holds a market share of approximately 9% with individual customers and 14% with corporate clients, serving 1.7 million individual customers and managing a €17 billion corporate loan book [3][10] - The bank has demonstrated strong profitability with a cost-income ratio under 35% and a return on tangible equity (RoTE) exceeding 20% [4] Group 3: BPCE's Commitment in Portugal - BPCE has over 3,000 employees in Portugal, reflecting its long-term commitment to the country [5] - The acquisition is expected to enhance BPCE's role as a development partner for the Portuguese economy, facilitating financing for local projects [6][10] Group 4: Strategic Implications - The acquisition will diversify BPCE geographically and improve its revenue profile by increasing the proportion of variable rate loans on its balance sheet [7] - The transaction aligns with BPCE's strategy to create lasting value through strategic investments [7][11]