The Bank of Portugal is in talks with China’s Anbang Insurance Group to divest the state-rescued Novo Banco, the good bank created out of Banco Espirito Santo (BES).

The price to acquire Novo Banco will include funds for a capital increase worth around EUR1bn to cover contingencies from lawsuits by creditors and investors who lost money at BES, Reuters reported citing unnamed sources.

Anbang’s total offer, which includes a direct payment to the state and capitalisation of Novo Banco, is reportedly the largest.

The other bidders for Novo Banco include China’s Fosun International and US fund group Apollo Global Management, who are expected to re-enter the race if talks with Anbang fail to materialise.

Portuguese authorities are offloading Novo Banco in a bid to recover the funds used to create the bank to rescue the assets and liabilities of the failed BES.

However, it is unlikely to secure the full amount back and the difference should be funded by the banking system through the Bank Resolution Fund, the news agency added.

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Novo Banco, created last August, has retained the majority of BES’s branches, deposits and loans, along with operations in Cape Verde, Venezuela, Mozambique and a 9.9% stake in Angolan lender Banco Economico.

It has shed shareholders’ and junior bondholders’ claims on the bank and its problematic units in the US, Libya and Angola.