Novo Banco losses weigh down on the Portuguese banking profits

  • ECO News
  • 24 August 2018

If it weren't for Novo Banco's results the Portuguese top banks would have now surpassed 2010's profits. CGD, BCP, BPI and Santander Totta gathered almost €1bn during the first semester of 2018.

First semester’s accounts are now closed, for the five major banks operating in Portugal. Novo Banco’s negative results, however bad, were not enough to damage the overall accounts’ balance of the whole banking system, which has accumulated €743m in profits, its best biannual performance of the last eight years.

BPI, due to its assets sales and activities in the country, reported the best performance reaching €366.1m in profits, followed by Santander Totta (€236,6m), CGD (€194.1m) and finally BCP (€150.6m).

Santander Totta justified its profit increase by having merged Banco Popular into its bank and due to an organic growth the bank is going through, while CGD saw its net profit as a result of a significant break in provisions and credit impairment.

Novo Banco was the only one leaving behind a negative account balancing: €231.2m in losses on the first semester.

Banking commissions aligned with profits, as they went up by 5%

The commissions the banking system is charging are also on the rise. Between January and June, the output for services and commissions increased by €1.082m, representing a 5.38% growth in comparison to the previous year.

Meaning that banks are billing, on average, €180m per month or €6m per day in commissions alone.

Despite the increase, the income from commissions is still lower than in previous years. In 2010, the profits from commissions and services were surpassing the €1.5bn yield. The decreasing trend started in 2013 and only now has it started to go up again.