The financial margin grew by 9.9% in one year to 99.2 million euros. The NPE (non-performing credit) ratio remained at 3.2% and impairment coverage stood at 73.0%.
Banco Montepio closed the first quarter of 2024 with a consolidated net profit of 32.1 million euros, which compares with 35.3 million in the same quarter of the previous year. That is, they fell 9.1%.
Banco Montepio explains that in the first quarter of 2023, the bank benefited from the extraordinary recovery of impairments following the non-recurring settlement of relevant exposures.
Profitability stood at 11.8%.
The financial margin grew by 9.9% in one year to 99.2 million euros, which increased the core banking product to 129.5 million, translating to a growth of 5.4% in one year.
Net commissions totaled 30.3 million in the first three months of 2024, compared to 32.7 million recorded in the same period of 2023, reflecting the reduction in commissions for management, administration and custody of assets and operations on securities, and those associated with credit operations. Partly due to the legal exemption from the credit processing fee for private customers.
The results of financial operations recorded in the first three months of 2024 were marginally negative at 0.1 million euros, demonstrating, however, an evolution
favorable of 0.2 million compared to the same period in 2023.
“Other results” in the first three months of 2024 were negative by 8 million euros,
essentially translating the accounting of extraordinary contributions from the banking sector and the additional solidarity, in the amount of 9.9 million.
The decrease in these contributions by 1.3 million compared to the previous year contributed to the favorable evolution of other results compared to that recorded in the same period of 2023, explains the bank.
Banking income grew by 7.1% in one year to 121.4 million.
Operating costs totaled 64.3 million euros in the first three months of 2024,
showing a decrease of 1.6 million (-2.4%) compared to the amount of 65.9 million calculated
in the same period of 2023, reflecting the decrease in personnel costs by 3.9 million, as a result of the effect of the operational adjustment, and the increases in general administrative expenses by 0.5 million and depreciation and amortization by 1.8 million. The number of employees is 2,991 in March.
The bank led by Pedro Leitão highlights the maintenance of “adequate operational efficiency embodied in the increase in banking product to 121.4 million euros (+8.0 million in one year) and the decrease in operating costs to 64.3 million euros (i.e. a drop of 1.6 million in one year).
Efficiency, measured by the Cost-to-income ratio, excluding “results from financial operations”, “other results” and costs related to the adjustment program, evolved favorably to 49.7% in the first quarter of 2024, compared to the 50.2% observed in the same quarter of 2023.
Banco Montepio highlights the evolution of the business in the first quarter of 2024, with particular focus on the growth of net credit and deposits by 1.3% and 2.2% in the first three months compared to December respectively, which “was decisive for maintaining capital ratios at levels comfortably above regulatory requirements, as well as for the reduced NPE ratio and the current solid liquidity position”.
The NPE (non-performing credit) ratio remained at 3.2% and impairment coverage stood at 73.0%.
“The aggregate of impairments and provisions reached a net value of 4.4 million euros in
first three months of 2024, translating the largest allocation at 14.9 million compared to the value observed in the same period of 2023, which had been extraordinarily influenced by the recovery of impairments following the non-recurring settlement of relevant exposures”, reveals the bank in a statement .
Regarding credit impairments, in the first three months of 2024 it totaled a net value of 1.7 million euros, compared to the impairment value of -14.4 million euros recorded in the same period of 2023.
“Despite the year-on-year evolution observed, the adoption of conservative credit analysis and granting criteria and the dynamism recorded in terms of credit recovery have contributed to the improvement of the credit quality of the portfolio, which presented a credit risk cost of 0 .1% in the first quarter of 2024 compared to 0.4% recorded at the end of the previous year”, assures the bank.
Impairment of other financial assets, other assets and Other provisions reached 2.8 million in the first three months of 2024, compared to 3.9 million recorded in the same period of 2023, “translating the evolution of impairments for trading properties into results of the regular process of updating the value of properties”, reveals the bank.
In the balance sheet, Credit to Customers (gross) totaled 11,878 million euros on March 31, 2024, that is, it fell 0.8% compared to the same period of the previous year, with performing credit registering an increase of 139 million compared to at the end of 2023, standing at 11,493 million.
Compared to the same period in 2023, performing credit increased by 79 million euros and non-performing credit decreased by 172 million, highlights the bank.
Customer Deposits reached 13,654 million euros at the end of March 2024, which represents an increase of 288 million (+2.2%) compared to that recorded at the end of 2023.
This evolution, says the bank, “was supported by the positive variation in deposits from individual Customers by 228 million euros and from the Corporate segment by 60 million”.
Compared to the same period in 2023, Customer deposits increased by 977 million euros (+7.7%), determined by the positive variation in deposits from individual Customers of 595 million and in the Corporate segment of 382 million euros.
“The mix of the Current Deposits/Time Deposits portfolio evolved to 40%/60% at the end of March 2024, compared to the 42%/58% observed at the end of 2023 and the 49%/51% recorded in 31 March 2023”, says the bank.
On March 31, 2024, capital ratios evolved favorably compared to the same period last year, “as a result of the reduction in risk-weighted assets (RWA) and the increase in own funds, highlighting the positive evolution of results, as well as the reinforcement of instruments eligible for tier 2 at 50 million euros realized in March 2024”.
“The RWA [Risk Weighted Assets] recorded a decrease of 454 million euros at the end of the first quarter of 2024 compared to the value recorded at the end of the same period of the previous year, as a result of the
measures taken to reduce non-productive assets and for a more efficient allocation of capital in investment decisions and granting credit”, details Banco Montepio.
Own Funds increased by 143 million to 1,470 million euros, mainly reflecting the positive evolution of the results generated and the impact of the new issue of subordinated debt carried out in March, in the amount of 250 million euros, which was partially mitigated by repurchase and amortization of two subordinated debt issues.
The Common Equity Tier 1 ratio is 15.6%, which compares to 13.6% in March 2023. This in the Phasing-in version. Because in the Fully Loaded version, the CET1 ratio is 15.5%.
Banco Montepio also adds that “the MREL Ratio determined as a percentage of total RWA stood at 21.5% on March 31, 2024, being above the requirement in force on March 31, 2024 as established by the Bank of Portugal including the applicable combined capital reserve requirement”.
The MREL Ratio determined as a percentage of the total LRE stood at 9.3% on March 31, 2024, “also comfortably above the minimum requirement”.
