Portugal’s largest listed bank Millennium bcp reported a 46% drop in its nine-month net profit to €146.3 million, dragged down by higher provisions and impairments in the wake of the coronavirus pandemic.
However, its net interest income (NII), a measure of earnings on loans minus deposit costs, was little changed at €1.15 billion from a year ago, the bank said in a statement.
On a positive note, its core net income – NII plus net fees minus operating costs – grew 1% to €835.2 million.
But loan provisions increased 25% to €374.2 million in January-September 2020 from a year ago, while other provisions and impairments skyrocketed 126% to €176.4 million, the lender said.
“We have significantly reinforced impairments in the context of the pandemic. (We’re) adapting the business to the crisis. We have moved from a growth mode to a balance sheet protection mode,” Chief Executive Miguel Maya told a news conference.
Portuguese authorities in March said bank customers could suspend loan repayments, in a move aimed at relieving pressure on businesses and individuals during the pandemic. The moratorium has been extended until September 2021.
Millennium bcp said it had already granted more than 100,000 such loan repayment holidays.
The bank said its non-performing exposures fell by €1 billion from a year ago to 3.6 € billion in September after it sold various problematic asset portfolios.
Millennium bcp, whose main shareholder is China’s Fosun group, said its fully implemented Tier 1 common equity (CET1) capital ratio stood at 12.4%, comfortably above the required 8.8%.
Original Story: Reuters |Sérgio Gonçalves
Photo: Millennium bcp website