September 15, 2015 / 10:57 AM / in 3 years

Portugal suspends Novo Banco sale after low bids, to resume later

A man uses a mobilephone outside Novo Banco's headquarters in Lisbon, Portugal September 15, 2015. REUTERS/Rafael Marchante

LISBON (Reuters) - The Bank of Portugal has suspended the sale of Novo Banco, the bank carved out of Banco Espirito Santo (BES) after a 4.9 billion euro rescue in 2014, due to low bids, but plans to relaunch it when conditions improve, the central bank said on Tuesday.

“The intention is to resume the sale process after the main factors of uncertainty have been removed, and, more precisely,

after the ECB capital requirement levels for all sizeable banks in the banking union are known,” it said in a statement.

A source close to the process also told Reuters that the sale should be resumed by the end of this year or at the start of 2016 and will include more options than just the sale of all of the bank’s capital.

The source said new European Central Bank capital requirements for banks had been the greatest uncertainty in the canceled sale, but the Bank of Portugal expects the new requirements to be known in two or three months.

The source said China’s slowdown and the Greek crisis also hit the sale.

Reporting By Sergio Goncalves and Andrei Khalip

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