Novagalicia sells EVO Banco unit to US investment fund for 60 million euros

Nationalized Spanish lender Novagalicia said Monday it had sealed an agreement to sell its EVO Banco unit and its branch network to US investment fund Apollo Management for 60 million euros in cash.

The Galician-based lender said the sale price represents 55 percent of EVO Banco’s net book value.

EVO is the brand used by Novagalicia for its operations outside of Galicia, Asturias and León. It has 80 branches, 590 employees and a client base of 249,218. As of the end of June, EVO had a loan portfolio of 702 million euros and funds under management of 1.603 billion.

Novagalicia said Apollo has pledged to maintain jobs at EVO, which will become the nucleus of its financial business in Spain. Apollo bought AvantCard in 2011 and recently acquired Finamadrid.

The state’s Orderly Bank Restructuring Fund (FROB) put EVO up for sale when it took over the reins of Novagalicia, which because unstuck due to its exposure to the ailing real estate sector. Under the terms of a loan of some 40 billion euros granted to Spain by the European Stability Mechanism (ESM) to clean up the banking sector, EVO needed to be sold off before the end of next year.

The FROB, which controls 63 percent of Novagalicia’s commercial banking arm NCG Banco, is looking eventually to offload the bank as is the case with Catalunya Banc, which was also nationalized.