State foresees €1.7Bn from Novobanco sale

The government is to receive €1.7Bn from the sale of Novobanco – at least going a small way towards compensating the estimated €8Bn that the banking sector and tax payers had forked out to keep the bank afloat.

The French banking group BPCE, which acquired Novobanco earlier this year, paid €6.4Bn for 100% of the bank.

The Resolution Fund gets 13.54% of the €1.7Bn, the General Directorate of the Treasury and Finances gets 11.46%. The State directly gets €733 million, and the Resolution Fund (which is on the parameters of the public administration) receives €866.6 million. All told, this 25% represents €1.6Bn of the €6.4Bn.

The almost €1,7Bn of revenue does not impact this year’s budget – meaning it will remain off-book and not help the State to obtain a surplus of 0.1% of the Gross Domestic Product (GDP) because it is not a current revenue but a ‘financial operation’, which in turn means that it reduces the public debt. In the Budget proposal, the government foresees a reduction in the national accumulated debt ratio to 90.2% of GDP in 2025 and 87.8% in 2026.

Source: Jornal Económico