Losses at Portugal’s Novo Banco, which was carved out of the collapsed Banco Espirito Santo, widened 25% in 2020 to 1.3 billion euros ($1.5 billion) after provisions for credit and asset risks and the coronavirus crisis. Chief Executive Antonio Ramalho said Novo Banco, which has been cleaning up its balance sheet since 2014 by removing toxic assets inherited from BES, said the process was complete and forecast “a period of positive results” from the first quarter. The unlisted bank, which is 75% owned by U.S. fund Lone Star since October 2017 and 25% by the state-backed Portuguese Resolution Fund, said on Friday that impairments and provisions rose 39% to 1.1 billion euros last year. The bulk of this was to cope with potential losses resulting from the exit from Novo Banco’s retail network in Spain and for higher credit risk, but the bank also took a hit of 268.8 million euros due to the impact of the COVID-19 pandemic. Its recurring core operating profit increased 4.5% to 369 million euros, while net interest income rose 8.3% to 555 million euros in 2020. Novo Banco also cut its non-performing loans (NPL) by 25% to 2.49 billion euros. After the sale of bad loan portfolios, its NPL ratio fell to about 9% of total loans in December, compared to almost 12% a year ago and over 33% in 2017. The bank said it would ask for a 598 million euros fresh capital injection from the Bank Resolution Fund, under the so-called contingency capital mechanism meant to keep solvency ratios at adequate levels required by regulators. Portuguese opposition parties have already blocked one such injection into Novo Banco. ($1 = 0.8485 euros)