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Novo Banco’s profit in the first half of 2022 was 266.7 million euros.

Novo Banco’s profit in the first half of 2022 was 266.7 million euros.

Novo Banco recorded a profit of 266.7 million euros in the first half of 2022. The result is the best in private banking in Portugal and almost double the amount received in the same period: in the first six months of 2021, the financial institution made a profit. 137.7 million euros.

In a statement to the Securities Market Commission, the bank says that “despite the current macroeconomic environment, characterized by inflationary pressures and, as a result, interest rate volatility”, there were “strong business performance with increased profitability.”

The institution, still led by Antonio Ramalho (who will hand over the report to Mark Bourque tomorrow), believes that performance is “in line with expectations for the first half of 2022, despite the current macroeconomic environment characterized by inflationary pressures and consequent interest rate volatility exacerbated by conflict in Ukraine.

The change in result is justified by “an improvement in bank revenues, which rose by 82.4 million euros, as well as a lower level of impairment and provisions” (down 78%).

The average balance of deposits amounted to 27.8 billion euros.

Loans to customers (net of impairment) amounted to 24.3 billion euros, up 2.8% compared to the value recorded in December last year, “confirming the growth trajectory of the loan portfolio in the corporate and private sector, as well as the favorable environment for interest rates.” . Gross credit reached 25.5 billion euros. Loans to companies amount to more than 14 billion euros, while households owe about 11 billion euros.

Bad debt (commonly referred to in financial jargon as Non-Performing Loans or NPL) was €1.7bn, down 3.1% from six months ago. The fall was not enough to meet the target the institution had set for the NPL ratio: it improved to 5.4% (from 7.3% a year ago and 5.7% in December), but still above the 5% target.

Net interest income fell by 7.3% to EUR 268 million. This indicator, explained in the bank, was affected by “the impact of senior debt issues in the fourth quarter and an increase in the average capital of cash investments, which slowed down the evolution of the average interest rate on assets.”

Commissions reached €144.4 million, up 6.5% from a year ago, “reflecting a solid
productivity and maintaining the positive trend of recent quarters.”

The commercial bank’s income amounted to 412.4 million euros (-2.9% compared to June 2021).

Between June 2021 and the same month of this year, Novo Banco lost about 300 employees: now the staff is 4167 people. During the same period, the number of branches decreased from 349 to 304.

Differences from permission fund
Novo Banco also emphasizes that the capital adequacy ratio Common Tier 1 Capital (CET1) it is “protected at a predetermined level up to the amount of losses already tested in assets protected by the Notional Capitalization Facility”. The institution states that “the amount requested with reference to 2021 of €209.2 million” took into account losses incurred on assets covered by the Notional Capitalization Fund as well as minimum capital conditions applicable at the end of the period. the same year in accordance with the Conditional Capitalization Mechanism.

The bank recalls that “with regard to the amount requested from the Settlement Fund (FdR) for 2020, there are two differences that result from discrepancies” with the FdR: on the one hand, “the provision for the termination of operations in Spain”. ; on the other hand, “an estimate of the interests in respect of which an award is made”. These differences add up to 165 million euros, which, according to the NB, “is due under the Notional Capitalization Facility and legal and contractual arrangements at its disposal are invoked to ensure that they are collected.”

Only Caixa earned more
The result reported by Novo Banco in the first half of the year is the highest private banking profit in Portugal during this period.

Santander came in second with €241.3m, BPI reached €201m, while BCP posted €74.5m and Banco Montepio posted a profit of €23.3m.

Among the major banks, only Caixa Geral de Depósitos fared better, posting a €486m result for the first six months of 2021.

Author: business magazine
Source: CM Jornal

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