The Bank registered a 37% drop in net income in the first half of the year, a period marked by Covid-19 pandemic.
On the same day that Santander made historical losses, Santander Portugal showed profits of 172.9 million euros. Net results shrank by more than a third compared to the same period last year. The bank reveals in a statement.
“The results of the first half of 2020 already incorporate, as expected, an important impact associated with Covid-19,” says Pedro Castro e Almeida, CEO of Santander Portugal in a statement in which the bank reveals that given the pandemic there will be no place for the usual public presentation of accounts.
In these first six months, the bank showed positive net results but fell 37.5% year-on-year. This drop is explained by the provisions made for future losses due to the crisis caused by the pandemic.
Santander Portugal reveals that “banking income amounted to Euro 659.4 million, a 6.3% reduction compared to the same period last year”, reflecting the lower activity in this first half of the year, when operating costs also shrank (-5.1%).
“Net interest income stood at 399.3 million euros, a year-on-year reduction of 6.9%, mainly reflecting the decrease in interest rates on loans, in a still highly competitive environment and a decrease in the demand for loans by companies outside the scope of the lines with State guarantees, and the management of the public debt portfolio.”
On the other hand, “net commissions, amounting to 183.1 million euros, fell 5.0% from June 2019, already fully reflecting the effects of the pandemic on activity, particularly a reduction in commissions on credit, and the impact of the suspension of several commissions, as part of the measures to support companies and families,” said the bank.
Santander Portugal’s exposure to risky assets has decreased. In a period in which over 88,000 moratoria on credit were granted, the bank reveals that the Non-Performing Exposure (NPE) ratio, calculated according to the EBA criterion, stood at 2.8% in June 2020″. It decreased by 0.5 percentage points over the same period, “with the respective coverage set at 61.0%”.
If the NPE ratio shrank, the capital ratio improved. “The Common Equity Tier 1 ratio (CET 1) stood at 19.6% (fully implemented) and 20.1% (phased-in) in June 2020, reflecting the organic generation capacity of capital, as well as the management of risk-weighted assets,” notes the institution.