BCP’s H1 profits drop 55% after impairments of 109 million for the pandemic

  • ECO News
  • 28 July 2020

The bank led by Miguel Maya reinforced the provisions for the Covid-19 pandemic, which penalized profits in the first half of the year.

BCP recorded a profit of 76 million euros in the first half of the year, a year-on-year fall of 55% due to the 108.8 million euros imparities that the bank set up to face the crisis caused by the pandemic. The information was presented in a communiqué sent to the Portuguese regulator (CMVM).

“It was a truly extraordinary quarter. It was unique to us. It was a quarter marked by a slowdown, lockdown, distancing and it has significant implications for the banking business,” summarised the BCP’s president at the results conference.

The bank’s net interest income increased 2.6% to 759.1 million euros, although net operating income decreased 4.6% to 1,070 million euros.

Deposits increased 5% to 83.2 billion euros, in a period in which the Portuguese increased their savings due to lockdown.

Regarding credit quality, an indicator that will gain relevance soon due to the impact of the pandemic on the level of default, BCP saw the ratio of non-productive assets (non-performing exposure/credit to customers) fall from 9.1% in June last year to 7% at the end of June this year.

With the reinforcement of impairment, the cost of risk worsened during this period, from 74 basis points to 85 basis points, a trend that has been seen in the rest of the sector.

As far as capital ratios are concerned, despite the slight decrease in CET1 ratios, the total fully implemented ratio rose from 14.7% in June 2019 to 15.5% at the end of last month. “We have a gap of 2.2 percentage points in relation to regulatory requirements. It’s an indicator of resilience to face the context of a pandemic that we’re going to have ahead,” Miguel Maya stressed.