- The transaction consists of a risk-sharing guarantee to support mid-cap companies and public sector entities.
- This operation will enable novobanco to finance small and medium-sized investment projects that can benefit less developed regions in Portugal.
- The EIB thus continues to improve access to finance and financing conditions for local companies.
The contract signed today consists of a €150m guarantee to be provided by the European Investment Bank (EIB) to novobanco. The guarantee enhances novobanco’s financing and risk taking capacity, through a 50% risk sharing in respect of new loans to Portuguese mid-caps and public sector entities, for a total of €300m, in particular, regions targeted by Cohesion Policy stand to benefit.
This guarantee aims to promote and accelerate investments by the private and public sectors, facilitating access to financing for mid-caps, key source of growth and employment for the Portuguese economy, along with SMEs, by mobilising new investments worth up to €420 million.
The guarantee is expected to be mobilised rapidly, which ensures that companies continue to have access to funding for operational and investment purposes in a context of heightened economic and financial uncertainties. Portuguese companies will for instance be able to benefit from lower rates, larger volumes of financing, sharing of additional risks with novobanco and the need to provide less collateral.
The guarantee is expected to be mobilised rapidly, which ensures that companies continue to have access to funding for operational and investment purposes in a context of heightened economic and financial uncertainties. Portuguese companies will for instance be able to benefit from lower rates, larger volumes of financing, sharing of additional risks with novobanco and the need to provide less collateral.
At the signing ceremony, which took place today, 11 January, EIB Head of Division for Western Europe, Gemma Feliciani, and Andrés Baltar, Director of novobanco, agreed that this agreement would meet the objective of providing financial support to mid-caps and public sector entities, enabling competitive and flexible financing, which in turn will preserve and create jobs in a still-unstable phase of the economic cycle.
“Supporting investments of Mid-caps and the public sector is of vital importance due to the multiple operational and financial challenges to which they are exposed in their current operating environment”, said Birthe Bruhn-Léon, Head of the Financial Institutions Department at the EIB. “By partnering with a trusted local banking partner and through the additional financing and risk-taking capacity provided, EIB is pleased to support those companies that play a key role in the Portuguese economy’s growth and transformation.”
Andrés Baltar, Director of novobanco, emphasised that “We are extremely pleased to announce the availability of this new line of financing, in partnership with the EIB, with the aim of supporting Portuguese mid-caps. This partnership reinforces novobanco's commitment to boosting sustainable growth and the competitiveness of the companies that are the main engine of our economy. Through this instrument, we are confident that we will be a catalyst for the success of companies' investment projects, thus contributing to the country's economic development and strengthening the relationship of proximity and trust with our clients.”
In 2023 the EIB achieved a total volume of financing to financial institutions in Portugal of c. €1 billion to the benefit of key EU policy objectives, ranking fifth among EU Countries, through a mix of guarantee, funding and securitisation products with a specific focus on support to SMEs and Mid-caps.
About novobanco
novobanco is a Portuguese universal bank that offers a full range of financial products to customers in the corporate and retail segments. Currently, with around 1.5 million customers and assets of €43.8 billion, it is the fourth largest bank in the Portuguese market, with an overall market share of 10% and a corporate segments share of 15%. With a significant position in the corporate market, novobanco continually seeks to offer its customers the best experience via a personalised sector strategy adapted to the needs of each customer and each business sector.