The Bank of Portugal hands in record dividends of 525 million to the State
The Bank of Portugal has paid the Portuguese State 525 million euros concerning 2017 dividends, the year it registered a 50% increase in profits to 656 million.
The Bank of Portugal (BdP) hands in record dividends of 525 million to the Portuguese State concerning 2017, an amount that is 50% higher than in the previous year. The payment took place last April 26, two days after the bank’s accounts were approved.
The Government was already expecting a generous dividend from the Portuguese central bank, since it inscribed a 500 million income in the State Budget for this year, but those earnings stood 25 million euros above the Executive’s forecast. And they are already allocated: according to the Prime Minister António Costa, they will help pay Portuguese hospitals’ debt.
Dividends were handed in to the State from the profit the institution headed by Carlos Costa was able to achieve last year. According to the 2017 annual report and accounts, BdP’s 2017 net income rose to 656 million euros, a 48% increase in comparison to 2016.
There are two main factors explaining this profit increase:
- The increase of the owed interest margin, which totaled 1,010 million euros and was a result of public debt securities held by the institution within the bond acquisition programmes from the European Central Bank (ECB);
- And the 520 million euros’ decrease in the provision of general risks, resulting mostly from the improvement of Portugal’s rating — the Bank of Portugal argues that it did not change its general risks provisioning policy.
In total, including dividends and income taxes concerning 2017, the State received 797 million euros from the Portuguese central bank.
Dividends rocket
Excluding provisions (which generated a 520 million euros’ earning) and taxes, results from the Bank of Portugal were 408 million euros, the lowest since, at least, 2013.
