BPCE Bets on Portugal With Novo Deal as France Faces Strains (1)

French lender BPCE took full control of Novo Banco on Wednesday, expanding its exposure to Portugal’s growing economy as its home country struggles with the widest budget deficit in the region.

“The Portuguese economy is currently one of the most dynamic in Europe, with a budget surplus and debt-to-GDP ratio below 100%,” Chief Executive Officer Nicolas Namias said in an interview. That’s “one of the reasons why we are interested in Novo Banco and in financing the Portuguese economy.”

BPCE on Wednesday formalized a pledge to buy the remaining 25% of Novo Banco from the Portuguese government, after purchasing an ...