By Patricia Kowsmann 

LISBON--Portuguese lender Banco BPI SA said late Tuesday that it will participate in the first round of the bidding process for Novo Banco SA.

Novo Banco kept the "good" assets, including loans and deposits, of Banco EspĂ­SHYrito Santo SA, which had to be broken up and bailed out in August following heavy losses from its exposure to its troubled parent.

Under the bailout, Novo Banco received a capital injection of 4.9 billion euros ($6.1 billion) from a domestic resolution fund, which included money from both the state and other domestic banks. The plan is to sell the lender so the fund can get its money back.

Parties must express their interest in buying the bank by Dec. 31.

Bank of Portugal Governor Carlos Costa has said binding offers for Novo Banco are due in the middle of the second quarter next year.

The chief executive of Spain's Banco Santander SA said last month that the bank would look at buying opportunities in Portugal, where it already owns a lender.

Officials from Chinese conglomerate Fosun International Ltd. were recently in Lisbon and asked the Bank of Portugal and the government about Novo Banco, according to a person familiar with the situation.

Earlier this month, Novo Banco presented details of its balance sheet, reporting a Common Equity Tier I of 9.2%, deposits of EUR25.1 billion and a credit portfolio of EUR43.8 billion, of which 72% were loans to companies. It reported credit at risk of default of 13.8% from the total portfolio.

Write to Patricia Kowsmann at patricia.kowsmann@wsj.com

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