Millenium BCP posts 7% hike in 1st quarter profits: EUR50 million

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Millenium BCP posts 7% hike in 1st quarter profits: EUR50 million

12:50 CAT | 09 May 2017

Lusa / Millenium BCP CEO Nuno Amado

BCP posted net profit of EUR 50.1 million between January and March of this year, seven percent up from a profit of EUR 46.7 million in the same period last year, the bank said on Monday.

BCP chairman Nuno Amado said in presenting the accounts in Lisbon that the improvement was linked to the “continuous expansion of the ‘core’ result, which has more than quintupled since the first quarter of 2013”.

BCP’s core results increased 19.5 percent in the first quarter (compared to the same period last year), reaching EUR 254.8 million, thanks to the 13.7 percent growth in net interest income to EUR 332.3 million and 2 percent reduction in operating costs to EUR 238.3 million.

Net commissions totalled EUR 160.8 million, down from EUR 163.9 million in the same period in 2016, with bank charges down 3.0 percent (-8.5 percent in Portugal alone), despite the increase in commissioning costs at a time when market transaction fees increased.

“When they say that banks are raising commissions, it does not seem that it is being reflected in the banks’ revenues. They are in line with last year’s, no more than that,” Amado said.

Amado also said that he does not foresee BCP making a “relevant price review”, but added that he believes that more banking should be “subject to commissioning, to reduce the informal economy”, though without going into detail.

In terms of expenses, operating costs were EUR 230.6 million, down 4.4 percent from the EUR 241.3 million recorded in the same period of 2016, but this excluded restructuring costs and the revision of the sector’s collective labour agreement.

Specifically, staff costs were EUR 129.2 million, down 5.4 percent less, “due to the reduction of 109 employees in Portugal from the end of March 2016”.

The bank now controlled by China’s Fosun said in a statement that the net result was sustained by the evolution of activity in Portugal, where the net result was EUR 9 million, 7.1 million euros more than the first quarter of the previous year, affirming the bank that there was a “positive effect of reimbursement” of the state capital (so-called CoCos), which took place in February 2017, as well as the “maintenance of commercial dynamics and strict control of costs”.

However, the largest contribution came from international activity (Poland, Angola and Mozambique), with a net result of EUR 41.1 million, in this case below the EUR 44.8 million of the same quarter of 2016. Developments in Angola and Poland resulted in a slight drop in profits to 41.1 million euros,” due to the lower contribution of the operation in Angola and despite the favourable evolution of the remaining operations, despite the penalising effect of mandatory contributions in Poland [ Resolution Fund and new tax] “.

On the balance sheet, loans to customers (gross) decreased by 4.4 percent year-on-year to EUR 52,242 million, the same fall value in Portugal, in this case to EUR 39,386 million. However, the bank points out that credit in Portugal increased by EUR 25 million between January and March alone.

Credit overdue for more than 90 days fell to 6.5 percent and credit at risk stood at 10.4 percent as of March 31, 2017. In the first quarter of 2017, impairment and provisions increased by 15.5 percent o EUR 203.2 million, with increase of impairments for funds in the construction area.

Deposits made in Portugal fell 0.8 percent compared to the first quarter of 2016 to EUR 34,632 million, although the bank said that between January and March alone there was a growth of EUR 609 million .

Finally, on March 31, BCP had a capital ratio of ‘CET 1’ to 11.2 percent, up from 9.7 percent in December 2016 and within the solvency indicator guidelines.

Amado said yesterday that the “road to 2018 will be difficult”, but that he is “quite confident” that the bank will achieve its objectives.

One of the goals of the bank is to achieve a EUR 1,000 million ‘core’ result in 2018.

Regarding possible sales, Amado said that the bank’s doors were closed. “We do not have any sales plan, except real estate and non-performing assets,” he said.

The BCP holds 66.7 per cent of the shares in the Millennium-BIM.

Source: Lusa / Público / AIM