BPI's profit fell by almost 70% to 104.8 million euros in 2020, after the bank registered "97 million euros of non-allocated loan impairments."
BPI’s profit fell by almost 70% to 104.8 million euros in 2020, after the bank recorded impairments of almost 100 million euros to cope with the impact of the pandemic.
“In a totally unexpected year, they are good results both in quantitative and qualitative terms,” said CEO João Pedro Oliveira e Costa in the presentation of the results.
A large part of this drop is explained by the fact that “BPI registered 151 million euros of net loan impairments, including 97 million euros of non-allocated loan impairments to provide for future impacts of the pandemic,” the bank said in a statement.
João Pedro Oliveira e Costa began by highlighting “the strong dynamism of commercial banking activity, in an adverse context of unprecedented scale”. He cited data on the loans’ evolution, which rose 5.4% (+1.3 billion euros) to 25,695 million euros, which allowed the market share to increase to 10.7%. The 722 million euros granted under the Covid-19 lines contributed decisively to this performance.
Deposits also increased by 13% to over 26 billion euros.
The strengthening of the business was reflected in the financial margin, which resisted the low interest environment and the pandemic: it grew by 3.2% to 450.1 million euros. Net commissions fell 5% to 244.9 million.
In terms of costs, BPI recorded a 4.5% YoY reduction in recurrent operating expenses, with staff expenses falling by over 2% to 239.4 million euros. The bank said 218 workers left and 46 branches closed in 2020. Cost-to-income fell to 58%.
In terms of asset quality, the bank’s NPL ratio dropped to 2.1% in 2020, still holding almost 600 million euros in non-performing loans.