The profits of the four Portuguese main banks got up to €1.8 BN in 2018, which means their daily revenue was at around €5M. How did they get here?
Caixa Geral de Depósitos, BCP, BPI and Santander Totta profited around €5M a day in 2018, making this the best year of a decade stained with a high national debt level. Novo Banco’s losses haven’t been presented yet, and with that out of the way, the Portuguese banks are about to get through their first year on track since 2010. How did they make it?
The increase in revenue incoming from commissions is a common denominator between all of these banks, and it helped them improve their results. However, each had different explanations for the results achieved.
For instance, Paulo Macedo’s bank announced on February 1 that CGD had reached €496M in profits through increasing by 7% their core business income (financial margins and commissions), reducing the overall costs allowed the bank to save €100 M together with the bank’s policy for lay-offs. These results allowed CGD to reach a good position and pay €200M in dividends to the state.
At Santander Totta, CEO Pedro Castro and Almeida announced profits at 500 million euros. This happened after the integration of Popular Portugal at the end of 2017 which had a positive impact on accounts: first, it increased the net interest income (+ 24.3% to 866 million euros) and commissions (+ 12.5% € 372.4 million). Then the sale of the Tagus property portfolio, in the amount of €600M to the Cerberus fund allowed to release 56 million euros worth of impairments that were associated with these assets formerly owned by Popular Portugal.
BPI also profited from the sale of Non-Performing Loans last year. But the €491M in profits was mainly boosted by the disposal of several financial holdings in Viacer and BPI Gestão de Ativos, and also from the credit card business. These had a return of €190M. It is important not to forget the commissions’ profits, which increased by 5.6% to €277.8M.
This Thursday BCP also announced a significant increase in profits – over €300 million – along with some news which the market was raving for: dividends at €30 million, about 0.2 cents per share. Motivating these results we can identify several factors, namely the improvement of the business in Portugal (profits rose almost 200%). Net interest income and commissions increased by 2.3% and 2.6%, respectively, to € 1,423 million and € 684 million. Here we also note that there was a positive impact on the reduction of impairments, by around €300 million.