Two other bidders, including China’s Fosun International and US fund Apollo Global Management, had also raised bids for buying the bank.
Banco de Portugal said in a statement that it was moving towards a final decision with one of the bidders. It, however, did not reveal the name of the selected bidder.
Wall Street Journal reported names of China’s Fosun International Ltd. and U.S. private-equity firm Apollo Global Management among the three bidders.
Banco de Portugal had established Novo Banco last year to rescue the assets and liabilities of Banco Espírito Santo (BES) and later broke it up into a "good bank" and a "bad bank." Novo Banco was carved out as the good bank.
BES had collapsed last year amid high first-half loss as a result of its exposure to its troubled family-controlled parent company.
While Novo Banco is considered to be an attractive asset due to its €72.5bn worth of assets and around an 18% share in the country’s banking market, it had reported an €468m loss for the five months to 31 December and credit at risk of default at 16.5% of the total loans.
It is being speculated that the price to be offered for the bank will be the primary criterion in a winning bid but the authorities will also assess the business project, the effect of the deal on competition and the stability of the financial sector, reported Reuters.
Portugal is hoping to recover the rescue funds through Novo Banco sale, but sources say, even if the sale happens, it will not be able to get the full amount back and the difference should be financed by the banking system via the so-called Bank Resolution Fund.
