Profits in the activity in Portugal totaled 112 million, 52% more than a year before, based on the increase in core income. The banking product in Portugal rose 20% to 316 million euros with the financial margin growing 19% to 245 million.
BPI recorded profits of 121 million euros in the first quarter, which represents an increase of 43% compared to the same period in 2023. Thanks to the activity in Portugal, as BCI’s profit contribution in Mozambique fell 15% to 9 million , and BPI does not fully consolidate the results of this subsidiary.
Profits in the activity in Portugal totaled 112 million, 52% more than a year before, based on the increase in core income. The banking product in Portugal rose 20% to 316 million euros with the financial margin growing 19% to 245 million. The bank highlights that the quarterly financial margin reached its peak in the 4th quarter of 2023.
Commissions rose 1% to 74 million euros.
Profitability in Portugal (measured by RoTE) stood at 17.2%.
“Income from commercial activity grew 16%, while recurring costs remained stable”, reveals the bank.
Costs remained the same compared to the previous year at 125 million euros, including a 2% increase in personnel costs to 63 million euros.
Cost-to-income stood at 38%, improving compared to the previous year.
João Pedro Oliveira e Costa, Executive President of BPI, highlighted that “in the first quarter, BPI maintained the good commercial performance recorded in recent years, with growth in activity, particularly in housing credit, credit to companies and in funding of customer resources.”
In the first quarter of 2024, BPI recorded a year-on-year growth of 3% in credit to 30.1 billion euros, while deposits increased by 4%.
In detail, the credit market share remained stable at 11.7% compared to December 2023. The mortgage loan portfolio increased by 2% in one year, to 14.6 billion euros.
Housing contracts have remained stable over the last five quarters, above 600 million euros (613 million euros in the 1st quarter of 2024). The mixed rate represents 61% of new housing credit contracts in 2024 and the fixed rate represents 20%.
BPI says it reached a market share of 16.2% in accumulated hiring up to February
2024. The market share of mortgage credit in the portfolio reached 14.4% in February
2024, which represents an increase of 50 bps in one year.
The corporate credit portfolio grew 6% in one year to 11.6 billion euros. The market share in corporate credit stood at 11.2%.
On the other side of the balance sheet, total customer resources increased by 3% in one year (i.e., +1.1 billion euros) totaling 38.4 billion in the first quarter, with stable market shares.
Customer deposits increased by 4% in one year, to 29.7 billion. Off-balance sheet resources (investment funds, capitalization insurance and others) registered a decrease of 2%, to 8.8 billion euros. “Additionally, there was an increase in the placement of structured products of +0.3 billion in one year”, adds BPI.
“We have a challenging year ahead, in which we can anticipate a normalization of market interest rates and a smoothing of the financial margin. We maintain a solid financial position and comfortable capitalization, which allows us to continue to boost the growth of Portuguese companies and support the Portuguese at every step of their lives”, added the bank’s CEO.
In terms of portfolio quality, the cost of risk is at a reduced level of 0.15%, which, together, translated into an improvement in the profitability of recurring tangible equity in Portugal to 17.2% (+7.6 pp in the last 12 months).
Credit impairments net of recoveries stood at 20 million in the quarter.
At the end of the quarter under review, BPI maintained an accumulated balance on the balance sheet of 28.5 million unallocated impairments.
The non-performing credit ratio measured by NPE (Non-Performing Exposure) at 1.6% with 98% coverage for impairments.
Measured by the Non-Performing Loans concept, the ratio improved to 2%.
The increase in the ratio of restructured credit not included in NPE is 1.2%, rising from 0.8% a year earlier.
But administrator Francisco Matos, questioned at the press conference, stressed that the increase in renegotiated numbers will not lead to an increase in NPE.
In fact, he gave as an example the 1,600 customers who restructure credits under Decree-Law nº 80-A/2022, of 25 November, which established a set of measures aimed at mitigating the effects of the increase in reference rate indexes interest rate on credit agreements for the acquisition or construction of permanent housing. This program ended in December only 65 of these clients requested “additional support”.
The properties obtained through credit recovery, in terms of net balance sheet value, amount to one million euros. In the last three years, 14 properties have been entered by donation.
In terms of recovery funds, the exposure totals 14 million euros.
The capital has a CET1 ratio of 13.7% and the total capital ratio is 17.4%.
The bank highlighted that it has 933 thousand regular digital banking users and users of the BPI app grew by 67 thousand in one year.
