Portugal’s Novo Banco plans to keep operations in Mozambique

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Portugal’s Novo Banco plans to keep operations in Mozambique

5:59 CAT | 08 Dec 2015

In file Club of Mozambique

Portuguese bank Novo Banco will keep its international operations in Spain and Mozambique and may divest those in Cabo Verde (Cape Verde), France, Macau and its London office, Portuguese daily newspaper Diário de Notícias reported.

In Mozambique, Novo Banco holds a 49 percent stake in Moza (formerly Moza Banco) and, according to market sources cited by the newspaper, the decision not to sell the operation is based on the impossibility of selling at a fair value.

These measures are part of the restructuring project of Novo Banco, the bank that kept the healthy assets of bankrupt bank Banco Espírito Santo (BES), which was presented last weekend to the resolution fund.

Once validated, the project will be sent to the Directorate General of the European Competition Commission, which will outline a restructuring plan to discuss with the Ministry of Finance.

Under the restructuring plan, which aims to demonstrate the bank’s viability to the European Commission, Novo Banco will have to close branches and reduce jobs, given that the current cost structure is similar to the old BES, “representing an unbearable burden on the employer.”

The restructuring also includes the need to recapitalize the bank with 1.4 billion euros, a requirement of the European Central Bank, which will be carried out in part by the sale of non-strategic assets, such as the insurance area and the bank’s assets abroad.

Novo Banco posted a loss of 551.9 million euros in the period from January to September and a loss of 252 million euros in the first half.

Source: Macauhub