Number of foreigners seeking bank loans rising

In total credit granted in Portugal in 2022, 11.4% of the amount went to people of foreign nationality (up from 9.36% in 2021).

The proportion of foreign people in the credit granted by banks grew between 2021 and 2022, representing more than 16% of credit granted to people between 41 and 50 years old and 45% to people over 61 years old, according to the Bank of Portugal.

In total credit granted in Portugal in 2022, 11.4% of the amount went to people of foreign nationality (up from 9.36% in 2021).

Among customers of foreign nationality who obtained credit, most went to people with a nationality of Brazil (25%) and the United Kingdom (10%), similar figures to 2021.

In home loans alone, foreign nationals accounted for 14% of the total amount borrowed in 2022 (up from 10.81% in 2021).

The leading nationalities were Brazil (20% in 2022 and 21% in 2021) and the United Kingdom (12% and 13%, respectively).

In 2022, nationals from the United States came in third place (9%), followed by those from France (8%) and Angola (7%).

There is also a noticeable increase in the weight of loans to foreigners as the age bracket rises.

In 2022, foreigners represented only 6.77% of mortgage loans to people aged 18 to 30, but 11.8% of loans to people aged 31 to 40.

In the 41 to 50 age group, foreigners obtained 16.4% of total mortgage credit and in the 51 to 60 age group the proportion was 27.8%. Over the age of 61, 45% of all mortgages went to foreigners in 2022.

Original Story: Portugal Global | News 
Photo: Big stock photo
Edition: Prime Yield

Novo Banco eyers IPO amid plans to stay independent

Portugal’s Novo Banco should be ready to seize the opportunity for an initial public offering when markets open up to listings, as it seeks to remain independent, its new CEO Mark Bourke told Reuters.

Analysts have speculated that profit-making Novo Banco, which emerged from the ruins of collapsed Banco Espirito Santo in 2014 and is controlled by U.S. private equity fund Lone Star, could be merged with another lender looking to consolidate its position in Portugal.

But Bourke, who took over in August, said that “Portugal is not like some of the north European countries, which are massively over-banked”, as the five largest players own 80%-85% of the banking assets, a high level of concentration.

Novo Banco is now “a profitable, well-capitalised bank that can actually compete, endure, remain independent in the Portuguese market, and can invest and expand,” he said.

The bank should build on its recovery track record and “be ready when and if the IPO opportunity arises to take advantage of it”, he said.

Bourke, who had been chief financial officer since 2019, would not say where the bank could seek to be listed, although Portuguese companies usually choose Euronext Lisbon.


Since Lone Star bought its 75% stake in 2017, Novo Banco has focused on de-risking, closing subsidiaries abroad, offloading bad loans and real estate under tough restructuring commitments agreed with Brussels. Portugal’s Resolution Fund has the remaining 25% stake.

Non-performing loans (NPLs) fell to €1.6 billion, or 5% of total credit, in September from 2.2 billion a year earlier. In 2017, its NPLs were 10.1 billion or 28% of total loans.

“The major part of the job is done. But we need to be looking at the European average, which is in the 2.5%-3% range… in the short to medium-term,” Bourke said.

Novo Banco’s nine-month net profit almost tripled to €428 million, citing improved commission income, capital market gains and a steep drop in impairments and provisions.

“This was the seventh straight quarter of profitability. We can generate 80 to 100 bps of capital through underlying profitability a year – that means we control our own destiny,” Bourke said.

Although nine-month net interest income (NII), or earnings on loans minus funding costs, fell 5.6% due to higher funding costs of senior debt issuance and other factors, NII rose by 2.5% between July and September from the previous three months, benefiting from rate hikes by the European Central Bank.

The average rate of its net interest margin stood at 1.29%, but the impact of the upward repricing of the portfolios should come in the fourth quarter and Novo Banco should end the year “well above 1.5%”, the upper bound of its forecast range, he said.

Original Story: Reuters |Sérgio Gonçalves
Photo: Novo Banco website
 Prime Yield

Portuguese lender Novo Banco almost triples nine-month net profit

Portuguese lender Novo Banco’s nine-month net profit almost tripled from a year earlier, the bank said, citing improved commission income, capital market gains and a steep drop in impairments and provisions.

The bank, which emerged from the ruins of collapsed Banco Espirito Santo in 2014, netted €428 million in the nine month’s to Sept. 30, up from €154 million a year earlier.

Novo Banco, 75% owned by U.S. private equity firm Lone Star and 25% by Portugal’s Resolution Fund, said its pretax return on tangible equity (ROTE) rose to 12.4% in September from 11% in June.

It said in a statement the results showed sustainable growth and “ability to generate revenue and capital despite the uncertain macro (economic) background” and high inflation.

Although nine-month net interest income (NII), or earnings on loans minus funding costs, fell 5.6% due to the higher funding cost of senior debt issuance and other factors, NII increased by 2.5% between July and September from the previous three months, benefiting from rate hikes by the European Central Bank.

After a major clean-up of its balance sheet, impairments and provisions fell by 86% to €22.5 million, while non-performing loans(NPL) fell to €1.75 billion, or 5% of total credit, in September from 2.2 billion a year ago

Fees and commissions rose 3.8% to €215.7 million in the nine months, while capital markets results increased 34.5% to €68.2 million.

Novo Banco’s fully loaded Common Equity Tier 1 solvency ratio improved to 12.1% in September, 90 basis points higher than in June.

Original Story: Reuters | Sérgio Gonçalves
Photo: Novo Banco website
Edition: Prime Yield

Banco Montepio reports a 9-month net income of €23.9 million

The bank highlights the rise in net interest income and commissions, the reduction of operating costs by €16.1 million and lower appropriations for impairments and provisions of €45.1 million.

Portugal’s Banco Montepio had consolidated net income of €23.9 million in the first nine months of the year, against a loss of €14.2 million in the same period in 2021, according to a release sent to the Securities Markets Commission (CMVM. In a statement, the bank highlights the rise in net interest income and commissions, the reduction of operating costs by €16.1 million and lower appropriations for impairments and provisions of €45.1 million.

“Notwithstanding the increases in mandatory contributions related to the banking sector, the Resolution Fund and the Deposit Guarantee Fund of, in aggregate, €3.2 million,” the bank added.

Consolidated net results for the first nine months of 2022 include, in the third quarter, “an estimated impact of -€22.7 million (after considering non-controlling interests) from the agreement signed for the sale of the stake held by Banco Montepio Group in Finibanco Angola S.A.” Even so, the bank added, “the consolidated net results for the quarter were positive, confirming the favourable trend seen over the last five quarters.”

Banco Montepio also noted the five consecutive quarters with positive net results and the increase in “core banking product” of €7.5 million, as compared to the first nine months of 2021, with net interest income up 1% and commissions up 7% on a year earlier.

Loans to customers (net of impairments) increased to €11.8 billion at the end of the period, 1.5% above the value recorded at the end of December. Customer deposits totalled €12.9 billion, up 1.8% from end-year. 

In the statement, Montepio also states that the cost of credit risk stood at 0.1%, down from 0.6% in the period a year earlier.

 In terms of operating adjustments, the bank said operating costs had fallen by €16.1 million or 8.5% as a result of lower staff costs, general administrative costs and depreciation and amortisation.

It also mentions the closure of nine branches compared with the same period in 2021 and the reduction in the number of Banco Montepio Group employees by 138 or 3.8% compared with September 30, 2021.

Original Story: Eco News | Lusa
Photo: Banco Montepio website
Edition: Prime Yield

CGD sees under 1% of clients with “vulnerabilities”

Caixa Geral de Depositos SA (CGD) said just under 1% of clients at the Portuguese state-owned bank are significantly vulnerable to rising inflation and interest rates. 

“What we see is a little under 1% of our customer base where we do see significant vulnerabilities,” Chief Financial Officer Maria Joao Carioca said at the Bloomberg Portugal Capital Markets Forum in Lisbon.  It’s a “relatively comfortable” situation for Caixa Geral at this stage, she said. 

Portuguese lenders have been shedding assets and selling soured debt over recent years to reduce their bad loan ratios. The ratio of non-performing loans at Portuguese banks fell to 3.4% at the end of June, according to the Bank of Portugal.

The European Central Bank last week doubled its key interest rate to 1.5% — the highest level in more than a decade. Bank of Portugal Governor Mario Centeno said in February that the impact of a euro-zone interest-rate hike would be quickly felt by Portuguese companies and families as credit in the country is dominated by variable interest rates.

While most mortgages in Portugal are floating rate, “at least in the last periods, we were already originating close to 30% of mortgages with fixed rates,” Banco Comercial Portugues SA CFO Miguel Bragança said at the same event.

Fiscal Discipline

Carioca, who has served as a board member of Euronext NV, said Portugal should maintain a disciplined fiscal policy to ensure that the country’s bond yields remain in line with other major European economies. Portugal’s government forecasts the budget deficit will narrow to 1.9% of gross domestic product this year.

“It’s crucial that we do not see our spreads broadening a lot versus European cores,” said Carioca. “I think we are very well positioned to ensure that.”

Bragança said that Portugal’s ability to cut public debt and fiscal discipline has been crucial for the southern European country to keep borrowing costs low. 

“Being able to maintain this discipline will be very important,” he said.

Original Story: Bloomberg| Henrique Almeida and Zoe Schneeweiss 
Photo:Edificio sede da CGD
Edition: Prime Yield

Millennium bcp posted a 63.4% jump in nine-month net profit

Portugal’s largest listed bank, Millennium bcp, posted a 63.4% jump in nine-month net profit thanks to a robust rise in core income stemming from policy rate hikes and despite losses at its Polish subsidiary.

The lender netted €97.2 million between January and September, up from €59.5 million a year earlier. Profit in its domestic business more than doubled to €295.7 million.

Its half-owned Polish subsidiary, Bank Millennium, reported a nine-month loss of €270.5 million as it counted the cost of loan repayment holidays imposed on Polish banks in July. r

Millennium bcp benefited from interest rate hikes by the European Central Bank to control inflation, after years of record low rates pressured lenders’ financial margins, and by central banks in other countries where it operates: Poland, Angola and Mozambique.

Millennium bcp’s consolidated net interest income, or earnings on loans minus deposit costs, rose 32.7% to €1.54 billion in the nine months. Its fees and commissions grew 3.7% to €573.8 million.

Chief Executive Miguel Maya said that “performance was supported by a 24.7% increase in the group’s core income and a strict management of operating costs”, but were hampered by results in Poland.

Original Story: Reuters | Sérgio Gonçalves  
Photo: Millennium bcp website
Edition: Prime Yield

Novo Banco to reach its NPL’s target by the end of the year, says CEO

Novo Banco (NB) should reach its 5% target for non-performing loans (NPL) “this year in a very short space of time”, the financial institution’s CEO believes.

Interviewed on Bloomberg TV, Mark Bourke said that once this goal is met, the second phase will involve reducing the bad debt ratio between 3% and 4%, a figure that will be achieved in two to three years through a “combination of restructuring and sales”.

The development has happened despite the war in Ukraine and rising rates. “If we look at the situation in historical terms, we are still normalising,” the CEO said. And at least for now this normalisation has not yet brought a significant increase in NPL. In Novo Banco and the Portuguese economy “we don’t see a significant rise in NPL formation”, he said. “And this would be a shared experience among banks.”

Asked whether he is aware of contacts by shareholder Lone Star with potential buyers of the bank, Mark Bourke replied with a peremptory “no, absolutely not”, adding however that “shareholders talk to lots of people”. But management’s role is to “prepare the bank and have it in good shape”.

Original Story: Jornal de Negócios |Hugo Neutel
Photo: Novo Banco
 Edition and translation: Prime Yield

Banks are more profitable and have less NPL

System banks show good results against bad debts as well as good profitability levels in the second quarter of the year, says the Bank of Portugal.

In the second quarter of the year, the total assets within the Portuguese banking sector increased 1.7%, a result leveraged by the increased in loans ad advances to customers and deposits at central banks by 0.68% and 0.63%, respectively.

Although loans to customers rose by 1.2%, there was a 2.3% increase in deposits, resulting in a decrease in the transformation ratio (difference between loans and deposits).

NPL ratio falls 3.4%

In the period under review, and according to banking system data released by Banco de Portugal, the gross non-performing loans (NPL) ratio fell 0.2 percentage points to 3.4%, which reflected “the decrease in NPLs (-4.0%) and the increase in performing loans (+1.8%)”. In net terms, the NPL ratio fell marginally by 0.1 percentage points to 1.6%.

Also, the NPL ratios of companies and individuals decreased. In companies 0.4 percentage points to 7.6% and in individuals 0.1 percentage points to 2.6%.

The supervisor led by Mário Centeno adds that “the decrease in NPLs had a greater contribution than the increase in productive loans in the reduction of both ratios”.

Profitability at 8.8%

Between April and June, return on equity (ROE) rose compared to the first quarter by 3.7% to 8.8%, a significant improvement on previous years, particularly 2020.

In the second quarter of the year banks as a whole recorded a 1.7% increase in total assets. Contributing to this were the increase in loans and advances to customers and central bank assets by 0.68 percentage points (pp) and 0.63 pp, respectively.

Although loans to customers rose by 1.2%, there was a 2.3% increase in deposits, resulting in a decrease in the transformation ratio (difference between loans and deposits).

Original Story: Expresso | Isabel Vicente 
Photo: Photo by Armindo Caetano in
Edition and translation: Prime Yield

BPI sells a €140 million NPL portfolio

BPI has completed the sale of the €140 million non-performing loans (NPL) portfolio Project Citron to funds managed by LX Investment Partners, the Portuguese bank informed. 

With a gross value of approximately € 140 million, the Project Citron is made of 15,000 contracts from about 5,000 clients, including both mortgage-backed and non-mortgage-backed loans.

“This transaction reinforces the strong position of BPI, which maintains the best  non-performong exposure (NPE) risk ratio in the Portuguese financial sector,” the bank said.

In the end of the 1st semesters, BPI’s NPE ratio stood at 1.6%.

Original story: Jornal de Negócios | Hugo Neutel 
Photo: BPI Facebook
Edition and translation: Prime Yield

Banks must be “vigilant” as defaults increase for families and companies

Banks should be “vigilant” with the possible increase in defaults by families and companies due to the current economic context of rising prices and rising interest rates, warned Rui Pinto, who was speaking in Parliament about his appointment as a director of the Bank of Portugal.

He explained that the rise in interest rates and inflation will reduce the income of families, which will consume less with companies.

In a scenario of cooling economic activity, which is already beginning to be felt, Pinto noted, this context would create “pressure on the ability of families and companies, particularly in economies with high levels of debt, to meet their debts.

This “will create some pressure on the evolution of default” in relation to which banks should be “vigilant”, said the current administrator of the Securities Market Commission (CMVM) in the Budget and Finance Committee.

Rui Pinto stressed two aspects: “We are not yet seeing a negative evolution” in defaults; on the other hand, banks have had a very significant reduction in non-performing loans in recent years, so the level of problematic credit “is now relatively low and in line with other jurisdictions”.

With the rise in interest rates, banks may benefit from an increase in financial margins, Pinto continued. But this increase in margin “may be offset by a need to increase impairments, as there may be pressure on credit quality,” he said, noting that “banks have profitability that is not yet desirable.

Rui Pinto was heard in parliament as part of his appointment by the Finance Ministry to the board of directors of the Bank of Portugal.

Original Story: ECO |Alberto Teixeira
Photo: Bank of Portugal
Edition and translation: Prime Yield

Housing credit slows for the first time in almost two years

In August, the total amount of loans for house purchase grew, year-on-year, less than it had grown in July. It’s the first slowdown since October 2020.

Mortgage lending in Portugal recorded its first slowdown in almost two years in August. This news should be seen in light of the tightening of monetary conditions by the European Central Bank.

In that month, the total amount of loans for house purchase grew 4.6% in year-on-year terms. This is a slowdown of 0.2 percentage points which, although slight, is the first to be recorded since October 2020, the Bank of Portugal said.

In August, banks had contracted housing loans with individuals totaling €99.7 billion. The growth recorded represents a rise of €200 million compared to the end of July.

In consumer credit, the amount totalled €20.5 billion at the end of August. This is also an increase of €200 million in comparison to July. But in this case there was an acceleration in the year-on-year growth rate, from 5.5% last month to 5.9% in August.

As for deposits by individuals, there was a reduction of €1.3 billion, but a growth of 6.8% compared to August 2021, to 181.4 billion. Deposits tended to shrink in August, recalls the Bank of Portugal, a period marked by summer holidays. The reduction was mainly in demand deposits.

Credit to companies also slows down

From households to companies, the Bank of Portugal reports that the amount of loans was €76.4 billion at the end of August. Loans to companies grew 1.5% year-on-year, which is 0.1 percentage points less than the growth recorded in July.

“This deceleration was more expressive in small and medium-sized companies and in companies in the manufacturing and accommodation and catering sectors. Loans granted to large companies and companies in the trade and transport sectors accelerated,” the supervisor’s statement said.

Finally, corporate deposits increased by €1.5 billion in August to 64.8 billion. It is a growth rate of almost 10%, but “represents a deceleration for the fifth consecutive month”.

Original Story: ECO | Flávio Nunes 
Photo: Photo by Miguel Saavedra in
Edition and translation: Prime Yield

BCP and Fidelidade unfazed by Fosun woes

Portugal’s insurance company Fidelidade and bank BCP are unlikely to be affected by financial problems reported by the Chinese company Fosun.

The Chinese authorities have asked China’s largest banks and Chinese state companies to declare their degree of financial exposure to the Fosun Group – one of China’s largest non-State conglomerations.

Fosun has a 85% stake in the share capital of insurer Fidelidade and a 30% stare in bank Millennium bcp according to Bloomberg. The new cased a fall in BCP shares by 5.69% to €0.14.
Sources close to BCP and Fidelidade remained unruffled as to exposure and possible fallout, largely because they do not hold Fosun securities and do not expect Fosun to collapse.

Officially, neither BCP nor Fidelidade have commented on the financial woes at Fosun and their exposure.

In July, the president of Fosun, Guo Guangchang in a written interview with Expresso said that the company had no plans to divest in Portugal”.

Fosun also owns the Luz Saúde Group because of its 85% stake in Fidelidade. The purchase of the insurer was its first acquisition in 2014, sharing capital at the time with Caixa Geral de Depósitos, holding a 15% stake. Fosun also holds a 5% stake in REN.

Original Story: Essential Business | News 
Photo: Millennium bcp website
Edition: Prime Yield

Uncertainty and inflation may pressure Portuguese banks, DBRS warns

The performance of the Portuguese banks in the first half of the year was positive, but some factors, such as inflation, pose risks to their future performance, rating agency DBRS warns.

Portugal’s banking sector is striving so much that the net income of the largest Portuguese banks has almost doubled compared to the same period in 2021. However, the uncertainty and macroeconomic scenario may pressure future profitability and assets, warned DBRS.

In an analysis of Portuguese banking, the agency concludes that higher revenues and lower provisioning and impairment expenses boosted earnings in the first half. Banks reported an aggregate net income of €1,293 million, up from €678 million in the first half of 2021.

Fee and commission income was up 12% year-on-year, “with solid performance across the board reflecting the progressive normalisation of economic activities postpandemic”. Meanwhile, The aggregate stock of NPLs “continued to decrease Quarter on Quarter (QoQ) and Year on Year (YoY), as asset quality remained largely resilient following the winddown of the moratoria.”

DBRS projects that in the short term, the stock of NPLs may continue to decline, albeit at a slower pace, or even stabilise. However, persistent inflationary pressure and high energy costs will add to borrower stress and increase asset quality risks over the medium term.

As for funding and liquidity conditions, DBRS said these “remained adequate” but noted that “the recent market volatility is contributing to increased refinancing costs in the wholesale market.” 

Although the first half of the year was positive for Portuguese banks, “the growing uncertainty and more challenging macroeconomic environment due to the high energy prices and persistent inflationary pressure will likely pressure future profitability and asset quality,” the rating agency explained.

Original Story: ECO News | Luís Alexandre 
Photo: Photo by Svilen Milev from FreeImages
: Prime Yield

Banks sell 1.6 billion in NPL and real estate during the holidays

In the middle of the holiday period, Portuguese banks are closing big deals like ECS, for 850 million. Novobanco sold its headquarters for 112 million. BCP, BPI, Montepio and Parvalorem also have portfolios on the market.

August is synonymous with holidays, but not for Portuguese banks, which are taking advantage of the good market conditions to do €1.6 billion worth of deals with non-performing loans (NPL) and real estate portfolios, according to information obtained by ECO.

“Most banks don’t need to sell these portfolios, but are doing so to take advantage of the good moment in the market and are getting prices they couldn’t imagine getting,” explains Marco Freire, CEO of Portuguese company Whitestar, which manages more than 10 billion euros in NPL and REO.

Half of this amount relates to the sale of ECS restructuring funds that the banks have just closed with the Davidson Kempner fund, in what will be the “real estate deal of the year” in Portugal, for a value of around 850 million euros, according to Jornal Económico.

Novobanco has also just sold the historic BES headquarters, on Lisbon’s Avenida da Liberdade, for 112 million euros to Spanish company Merlin Properties. BPI has sold the “Citrus” portfolio valued at around 100 million to LX Partners, a market source told ECO.

Other ongoing deals include BCP (with the “Aurora” NPL and REO portfolio worth 80 million), Santander (with the “Guadiana” property portfolio worth 100 million) and Montepio (with the “Alqueva” NPL secured portfolio worth 130 million), while Parvalorem, the vehicle that manages the spoils of the former BPN, has just unveiled plans to put the Imofundos property fund worth 250 million back on the market.

All in all, that’s €1.622 billion in business that is not part of the banks’ core activity. 

At this stage, banks are putting smaller portfolios on the market, when they were used to seeing large portfolios in recent years. This is mainly a reflection of the huge effort to reduce non-performing loans in recent years, which left banks with a level of problem loans at lows at 3.6% at the end of March.

Yet banks still had around €11.9 billion in hard-to-collect loans on their balance sheets, which will already correspond to the most problematic cases that have not yet been resolved. They also have more than a billion in restructuring funds.

Moment of inflection in the market

Whitestar’s CEO admits that the market may be nearing a “moment of inflection and transformation”, given the high-inflation environment and rising interest rates by central banks.

“Until two or three months ago, the market was overcompetitive. Investors were looking for low levels of returns, given the level of product risk, and there was a lot of liquidity and capital available. From the moment we started to see a rise in inflation and interest rates, investors started to have alternatives,” explains Freire.

There are already signs of these changes. There are “more aggressive” investors that are “temporarily” leaving the market “to try to understand where things are going”, according to the head of Whitestar. The other issue is the price, insofar as there are divergent expectations in relation to the values banks are demanding for portfolios.

Even so, Portugal continues to register “a good binomial demand / supply in the market,” ensures Marco Freire.

Inflation could lead to an increase in NPLs

In relation to 2023, specialists anticipate the continuation of this trend, essentially appearing portfolios around 100 million euros. And although rising interest rates could leave many families struggling to pay off their home loans, with an impact on the increase in bank bad debt, the effect will not come about immediately, but in two or three years.

For Marco Freire, “the main question is to know how long this situation will last” of escalating inflation and rising interest rates. “If we continue with this level of inflation for a long time, NPL levels will rise considerably,” he says.

Original Story: ECO | Alberto Teixeira 
Photo: Novo Banco website
Edition & Translation: Prime Yield

US’s Davidson Kempner to pay €850 million for the ECS funds

The ECS funds – FLIT and Recuperação Turismo Funds – will be sold for around €850 million to US investment management company Davidson Kempner Partners. The banks, which own these funds, have already reached a final agreement, but the operation still depends on regulators and is only expected to be concluded at the end of the year, according to the Portuguese newspaper Jornal Económico.

Caixa Geral de Depósitos, BCP, Novo Banco, Santander Portugal and Oitante (ex-Banif) reached an agreement with the North Americans for the sale of FLIT and Recuperação Turismo funds, according to a source close to the process. 

The agreement did not include the Recovery Fund, which will remain on the banks’ side. In this context, the banks may earn more money when this third fund is sold. The deal now depends on the market regulators, but the operation should be concluded at the end of this year.

Original Story: ECO News |News 
Photo by Armindo Caetano in FreeImages
Edition: Prime Yield

Portuguese banks are in no rush to raise interest rates on savers deposits

Portugal’s banks are in no rush to raise interest rates on savers’ deposits even though the European Central Bank has done so by 0.5%.

Portugal’s five main banks Santander Totta, CGD, Novobanco, BPI and BPC say that competition will dictate if interests rates on savings will go up or not and not Euribor rates as happens with renumeration of mortgages.

Interest on new mortgages in Portugal have risen since the start of the year, from 0.81% in January 2022 to 1.47% in June; in the Euro area, increases have been taking place since December, from 1.32% to 1.9% for the same period, according to data from the Bank of Portugal.

However, regarding personal deposits, interest only changed in June with the European Central Bank rate increasing from -0.5% to 0%.

Nevertheless, savers continue to put their savings in banks despite there being no incentives. In June, the Portuguese deposited around €180 billion even though they received negligible interest.

Original Story: The Portugal Resident | Portugal 
Photo: BPI Facebook
Edition: Prime Yield

Montepio expects losses of up to €100 million from selling Finibanco Angola

After the deal with Mário Palhares failed, Banco Montepio has already found a buyer for its Angolan bank, in an operation that could represent losses of up to €100 million.

The Associação Mutualista Montepio Geral (AMMG) bank agreed to sell Finibanco Angola to a Nigerian bank, Access Bank, but the operation is not yet closed, according to information gathered by ECO. The bank headed by Pedro Leitão is still doing its sums for the operation. And they are not exactly the best. It is estimated that the sale could represent losses of between €80 million and €100 million, two sources told ECO.

The impact of the transaction (if it goes ahead) is not insignificant for a financial institution that has posted poor results in recent years (6.6 million in 2021 and 11 million in the first quarter of this year) and where the financial capacity has to be managed carefully. 

Officially, the bank makes no comments on this process. ECO knows that there is still no final decision regarding the sale, which may not materialise. 

The buyers have already been presented to the National Bank of Angola (BNA), the Angolan banking supervisor, which has to allow the sale. Access Bank, which has been in existence for around 30 years, is headquartered in Lagos, the Nigerian capital and is present in ten other markets, including the United Kingdom, South Africa and Mozambique. 

In Lisbon, the Bank of Portugal is also closely monitoring this dossier, which it wants to see resolved so that the next board can focus on the core business of a bank which, after restructuring over the last two years, continues to make its way towards profitability. 

Finibanco Angola joined the Montepio group in 2010, when Finibanco was acquired for €250 million

Original Story: ECO News
Photo: Montepio website
Edition: Prime Yield

Novobanco sells logistic portfolio with a positive impact of €62 million

Novobanco has sold a portfolio of logistics assets in Portugal for €208 million and says the deal will have a positive impact of €62 million on this year’s accounts, as well as a 35 basis point improvement in the capital ratio. 

Without giving figures on the deal, the bank revealed an agreement for the sale of a real estate portfolio comprising predominantly logistics assets, held by real estate funds NB Património and NB Logística, both managed by GNB Real Estate, and in which the banking institution held, on average, a stake of around 75%.

Later, the Portuguese lender made a new clarification to the market, informing the price of the sale after a competitive bid process and the impact it will have on the bank’s income statement if the transaction is completed. It did not indicate who the buyer would be.

In the previous statement, the bank spoke of the success of the operation, which “reflects the positive moment of the market in this real estate segment, with a significant reduction in yield over the last 12 months and consequent increase in price, given the higher demand for logistics assets post-pandemic.

This deal will give an even bigger boost to Novobanco’s profits, which doubled in the first quarter of the year to €142.7 million. 

Since it was sold to the Lone Star fund, the bank has been undergoing deep restructuring and making portfolio sales of troubled and deemed non-core assets. Many of these operations generated million-dollar losses for the bank, forcing the Resolution Fund to inject money (more than €3 billion) into the institution to offset the losses and restore the capital balance.

Original Story:  ECO News | News 
Photo: Novo Banco website
Edition & Translation: Prime Yield

Crédito Agricola’s profits cut for half in Q1

The Crédito Agrícola group added a first-quarter profit of €35.7 million, which compares with earnings of €72.5 million in the same period last year.

Crédito Agrícola posted a net profit of €35.7 million in the first quarter of this year, 50.7% less than in the same period last year, the group led by Licínio Pina said in a statement.

Net interest income fell 12.3% to €75.3 million, but the bank’s net commissions rose 23.3% to €33.2 million euros, the financial institution said.

Operating income ultimately fell 27% year-on-year to €132.2 million.

According to Crédito Agrícola, the fall in first quarter profit was influenced by the results, non-recurring, obtained in the first quarter of 2021, related to net gains from financial operations, amounting to €51.3 million, and retroactive interest, relating to 2020, received under the ECB – European Central Bank financing programme.

Included in the result of the Crédito Agrícola group are contributions from the insurance business in the amounts of €2.7 million in the case of CA Vida and €3.4 million via CA Seguros.

In the first quarter the loans and advances to customers portfolio grew 3.5%, to €11.5 billion.

The NPL (non-performing loans) ratio improved from 7.2% at the end of 2021 to 6.7% at the end of March.

“At the end of the first quarter of 2022, the Crédito Agrícola Group’s solidity and liquidity levels remain above the recommended minimum levels,” indicates the group, which reports CET1 and total equity ratios of 18.8% (including net income for the 2021 financial year), a leverage ratio of 8.2%, a liquidity coverage ratio (LCR) of 429% and a stable funding ratio (NSFR) of 155.2%.

Original Story:  Expresso | Miguel Prado 
Photo: Crédito Agricola Website
Edition & Translation: Prime Yield

NPL from households and NFC fall as credit concession is on the rise

According to the latest data from Bank of Portugal, at the end of the 1st quarter of 2022, the balance of the volume of loans granted to non-financial companies (NFCs) was 2.1 billion euros, 98.6 million euros more than at the end of March 2021 and 21.7 million euros more than in December 2021. And, now the Regional Directorate of Statistics (DREM) from Madeira released its analysis of these figures, highlighting them as another indicator of market confidence among consumers.

This is because “the overdue credit ratio for this type of company increased 0.4 percentage points (p.p.) in relation to the end of 2021 at 2.4% at the end of the reference period”, the directorate stresses,  but “compared with the same quarter of the previous year, there was a reduction of 1.2 p.p.”,. “On a national level, the overdue loans ratio fell 0.1 p.p. in comparison with the previous quarter and 1.1 p.p. in homologous terms, not exceeding 2.2% at the end of the first quarter of 2022”.

It should be noted that “the amount of non-performing loans (NPL) among non-financial companies, headquartered in the Region [Madeira], stood, in the period in question, at 49.0 million euros (+8.1 million euros than last December and -22.3 million euros compared to March of the previous year)”, which can still be seen as a warning sign to be taken into account.

In the case of debtors in the NFC sector (companies) with overdue loans, at the end of March 2022, the percentage “was 14.4%, and this indicator has remained below the national average (15.0% in the same period) since July 2020,” says the DREM.

“In the sector of households and Non-Profit Institutions Serving Households (NPISHs) there was a year-on-year increase of € 62.6 million in the balance of loans granted, bringing it to € 3.2 billion at the end of the 1st quarter of 2022,” it reveals. “When the balance is compared with the previous quarter, there is also an increase of around €35.5 million. If the analysis is more detailed, it can be seen that 67.5% of that balance referred to the housing segment and the remaining 32.5%, to consumption and other purposes”, the document explains.

With regard to non-performing loans (NPL) “in the housing segment, these did not exceed €11.9 million euros, representing a NPL ratio of 0.5%, thus maintaining the historical minimum for the available series, which began in March 2009. This percentage is slightly above the national value (0.4%). Between March 2021 and March 2022, the ratio of overdue housing loans ratio was reduced by 0.3 p.p. in the Region” of Madeira, the DREM guarantees.

To attest to this good wave of banking, “the number of debtors of the institutional sector households and NPISHs grew in relation to the previous quarter to 100.100, and at the end of the 1st quarter of 2022, there were around 44,400 debtors with mortgages and 83,500 with consumer credit and other purposes”, almost double.

Original Story:  Diário de Notícias Madeira  | Francisco José Cardoso 
Photo: Photo by Svilen Milev in FreeImages
Edition & Translation: Prime Yield