LISBON (Reuters) – U.S. private equity fund Lone Star and Portuguese authorities are set to share 1.3 billion euros ($1.34 billion) when Novo Banco makes its first dividend payout in the approaching months.

Novo Banco was created in 2014, carved out of the collapsed Portuguese bank BES after a multi-billion-euro state bailout.

Since 2017 Novo Banco has been 75% owned by U.S. private equity Lone Star, with the Portuguese banking resolution fund and the state owning the remaining 25% stake.

Finance Minister Joaquim Miranda Sarmento said on Wednesday that “Novo Banco asked the European Central Bank for authorisation to distribute that quantity of dividends” to shareholders making an allowance for the bank’s results and its gathered excess capital following a protracted ban on dividend payouts.

The bank was banned from making dividend payouts from 2017 until December 2025, but last month the three shareholders agreed to lift that ban, paving the best way for a possible initial public offering this 12 months.

It has turn out to be overcapitalised with a core Tier-1 fully loaded capital ratio of 20.7%, greater than double the minimum requirement of 9.3%.

“The state as an entire – resolution fund and the Treasury – should receive greater than 300 million euros in dividends in April or May, which continues to be a small a part of what taxpayers put within the bank,” the minister said.

Novo Banco lost 1.3 billion euros ($1.37 billion) in 2020, pressured by impairments still linked to assets inherited from BES, but returned to profit in the next three years.

It made a consolidated net profit of 610 million euros in the primary nine months of 2024.

($1 = 0.9677 euros)

(Reporting by Sergio Goncalves. Editing by Jane Merriman)