Asked by Lusa if the Novo Banco situation would be resolved by the end of the week, Costa said, “Yes, that’s what we are expecting.”

The Portuguese Prime Minister was speaking in Funchal, Madeira island, where he arrived on Tuesday morning, to meet with the Funchal local authorities, the President of Portugal and the president of the Regional Government.

On Friday, Portugal’s Finance Minister, Mário Centeno, said negotiations for the sale of Novo Banco were going well, adding that conditions were in place for an agreement, although the deal had not been closed.

"Negotiations as part of the process for the sale of Novo Banco are going well, we consider that there are conditions for an agreement,” said Centeno at a press conference, declining to give further details.

Since February the Government has been negotiating the sale of Novo Banco exclusively with US fund Lone Star.

On Thursday the Governor of the Bank of Portugal, Carlos Costa, said in parliament that exclusive negotiations were underway with US fund Lone Star for the sale of Novo Banco, noting the complexity of the process.

"My hope is that after this process ends the transitional bank can be considered a case study on a European level,” Carlos Costa said, noting he believed the deal would go ahead.