Novo Banco just sold for €6.7 billion. The twelve-year rescue cost €8 billion.

Good morning, Lisbon. It's Sunday, 3 May. Twenty degrees, partly cloudy, and the long weekend is winding down. Today is the last day to see the Vhils exhibition at MUDE.

🌬️ AIR QUALITY: 22 (Good).

🗞️ TOP STORY

NOVO BANCO JUST SOLD FOR €6.7 BILLION. HERE'S WHAT THE TWELVE-YEAR RESCUE ACTUALLY COST

On Wednesday, the sale of Novo Banco to French banking group BPCE was completed. The price: €6.7 billion for 100% of the bank, making it the largest cross-border banking acquisition in the eurozone in over a decade. The Portuguese state, which held a 25% stake (split between the Resolution Fund and the Treasury), will receive approximately €1.67 billion. Lone Star, the US fund that owned the remaining 75%, takes the rest.

The number that matters more is the one underneath. Novo Banco was created in August 2014 after the collapse of Banco Espírito Santo, which at the time was Portugal's third-largest banking group. BES reported a record half-yearly loss of €3.6 billion, serious financial irregularities had been uncovered, and CEO Ricardo Salgado had been forced to resign in June. The Bank of Portugal, the Portuguese government, the European Commission, and the European Central Bank agreed to a resolution: the viable parts of BES would be transferred to a new institution. That institution was Novo Banco.

Over the twelve years that followed, roughly €8 billion in public money was injected into the bank through various mechanisms — capitalisation rounds, contingent capital, and Resolution Fund contributions funded ultimately by Portuguese taxpayers and the wider banking sector. The sale to BPCE, combined with dividends already received, allows the state and the Resolution Fund to recover approximately €2 billion of that investment. The remaining €6 billion is gone.

The sale did not go quietly. In October 2025, the Polícia Judiciária raided Novo Banco's headquarters and the offices of consultancy firm KPMG as part of a criminal investigation into the sale of toxic assets inherited from BES. The timing was notable: the raids happened on the same day the Finance Ministry was hosting a ceremony to mark the agreement to sell the state's stake. When news of the searches broke, officials left the event without answering reporters' questions. The investigation remains active.

What this means if you bank with Novo Banco. Your bank is now French. BPCE is France's second-largest banking group, operating through Banque Populaire and Caisse d'Epargne. Novo Banco has 1.7 million customers, roughly 300 branches, 4,100 employees, and a 9.2% market share. BPCE has said the integration is part of its Vision 2030 strategy and that Portugal will become its second-largest domestic retail market. Day to day, very little changes immediately — your accounts, cards, and branches stay the same. Longer term, expect a gradual alignment with BPCE's systems and product offerings. Mark Bourke will remain as CEO. Staff bonuses will be paid this month, following a successful employee campaign.

What this means for Portugal. The BES collapse and the Novo Banco rescue is one of the defining financial stories of modern Portugal. For twelve years it has been a running wound in public trust: a private bank that failed spectacularly, was rescued with public money, was sold to a US fund that extracted significant value, and has now been sold again to a French bank for a price that recovers a quarter of what was spent. The criminal investigation into asset sales adds a further layer. The transaction is closed. The questions it raises about who bears the cost when banks fail are not.

Bottom line: The state is getting €1.67 billion back from a €8 billion rescue. The bank that emerged from the ruins of BES is now in French hands. For Novo Banco's 1.7 million customers, very little changes today. For Portuguese taxpayers, the maths has been settled — and it does not come out well.

⚡ QUICK HITS

Fosun is weighing its exit from BCP. The Chinese conglomerate is considering selling its 20.45% stake in Banco Comercial Português, Portugal's largest listed bank, according to Expresso. The holding, currently valued at around €2.7 billion, is no longer seen as strategic. Fosun originally invested around €700 million and stands to walk away with a capital gain of approximately €2.4 billion, plus roughly €260 million in dividends already collected. If Fosun sells, it would mark the second major foreign exit from Portuguese banking in a week, following the Novo Banco sale. The Portuguese banking landscape is shifting fast.

The CGTP has not ruled out another general strike. Secretary-general Tiago Oliveira said at Friday's May Day rally that a new general strike remains "one of the forms of struggle on the table." The Concertação Social reconvenes on Wednesday. Both the UGT and CGTP have rejected the Trabalho XXI reform package. Montenegro has said the bill goes to parliament regardless.

Sardine season opens tomorrow. The annual fishing season begins May 4 with a quota of 33,446 tonnes. Fresh sardines will start appearing in Lisbon's markets and restaurants over the next week or two, building toward the Santos Populares street parties in June.

🍽️ SPOT OF THE DAY

GLEBA (ALCÂNTARA)

Sunday morning, long weekend, and what you want is bread. Not toast from a packet. Not a reheated croissant from a hotel breakfast bar. Actual bread, made properly, from someone who cares about the grain it came from.

Diogo Amorim opened Gleba on Rua Prior Crato in Alcântara in December 2016, in his early twenties. Before that he'd trained at Vila Joya, the two-Michelin-starred restaurant in the Algarve, and at The Fat Duck in England, where he first started making bread seriously. When he came back to Lisbon, he didn't open a restaurant. He opened a bakery.

The project started with a conviction that most bread in Portugal had become industrial and forgettable, and that the fix was to go back to Portuguese cereals. Gleba works exclusively with national grains, particularly barbela wheat, an indigenous variety from Trás-os-Montes that was almost unknown a decade ago and is now closely associated with this bakery. The cereals come from small sustainable farmers. The flour is milled in-house on a traditional granite stone mill. The dough ferments for a minimum of 24 hours in hand-woven wicker baskets. The result is bread that tastes like bread used to taste, and that lasts for days rather than going stale by lunchtime.

The daily lineup is two sourdough loaves (barbela wheat and rye), a traditional white corn broa, and a rotating special — dried figs and cinnamon, galega olive paste from Alentejo, dark chocolate and blueberries, rosemary and pear, depending on the season. Beyond the bread, there are pastries, sandwiches, coffee, and a growing range of Portuguese products. What started as a single Alcântara bakery has since expanded to more than twenty locations across Lisbon, Cascais, and the South Bank, but the original on Rua Prior Crato is still the one worth visiting, because you can watch the team work and the granite mill turn.

→ See why the locals love it ←

Rua Prior Crato 14-18, Alcântara. Sunday hours: 9am to 3pm. Wednesday to Saturday 9am to 8pm. Closed Monday and Tuesday.

Insider tip: Go early on a Sunday. The broa sells out first — usually before noon. If you're buying for the week, the barbela wheat sourdough keeps well for four to five days. Ask what the special loaf is before you commit to anything else.

📅 WHAT'S ON

Reach Lisbon's expat community. Advertise in The Lisbon Letter. Request our media kit.

See you tomorrow morning.