Bank of Portugal gives 607 million in dividends to the State

  • ECO News
  • 13 May 2020

The Bank of Portugal has already paid out 607 million euros in dividends for 2019, a year in which profits fell to 759 million.

Banco de Portugal paid the State 607 million euros in dividends relating to last year, an amount almost 6% less than the record distributed a year earlier.

The dividends that were already paid two weeks ago to the State correspond to a 38 million euros reduction compared to 645 million distributed last year, show the accounts of the institution led by Carlos Costa, disclosed this Wednesday.

However, adding the income taxes for 2019, the State received from the central bank 956 million euros, an amount that can help to compose the government’s accounts in view of the growing financial responsibilities imposed by the pandemic.

This overall figure is obtained from the profits recorded by the Bank of Portugal last year. According to the Activities and Financial Statements 2019 report, the institution led by Carlos Costa showed a net profit of 759 million euros last year. This result corresponds to a decrease of 47 million euros (5.8%) compared to 806 million euros in 2018.

Regarding last year’s numbers, the institution led by Carlos Costa highlights three main components. Among them, the Central Bank emphasizes the 998 million euros in net interest income, a year-on-year decrease of 67 million euros. According to the Bank of Portugal, this figure is explained by the “decreasing interest rates, in terms of both asset management and monetary policy.”

The result of financial operations and unrealised losses amounted to 45 million euros, 23 million less than in 2018, in “a year in which the Bank of Portugal recorded significant gains following a strategic reduction in the Bank’s investments in foreign currency.”

Finally, the Central Bank highlights the results associated with non-recurring factors. “Specifically (i) gains from the return, by the Mutual Agricultural Credit Guarantee Fund (FGCAM), of contributions made by the Banco de Portugal to that Fund under the establishment of a single national deposit guarantee scheme, in accordance with Article 4 of Decree-Law No 106/2019 (81 million euros) and (ii) the amount received in respect of the ECB’s liquid reserves under the five-yearly capital key adjustment (26 million euros).”