According to the bank, the negatives results were influenced by the unfavourable impact induced by the Covid-19 pandemic.
Montepio bank announced on Friday that it recorded a loss of 80.7 million euros in 2020, compared to a profit of 22 million euros in 2019, partly due to the “unfavourable impact” of the Covid-19 pandemic.
In a statement, the bank explained that the results were influenced by the unfavourable impact induced by the Covid-19 pandemic, which led, in particular, to the greater impairment for credit risks (77.5 million euros) and non-recurring costs related to the ongoing adjustment plan (35.1 million euros).
According to Montepio, the global objective outlined in the adjustment plan for the optimisation of the branch network in 2020 was achieved, closing 37 retail branches.
As a result of the mutual agreement termination, early retirement programme and retirement due to age limit, the number of employees was reduced by 241.
Because of Covid-19 and under the special aid regime provided to families and companies, Montepio bank granted 38,000 loan moratoria totalling 3.2 billion euros as at 31 December 2020.
According to the bank, despite the negative result, the business performance allowed it to reverse the downward trend in loans to customers (gross) observed in the last decade, which recorded an increase (of 336 million euros) in 2020, amounting to 12.357 billion euros.
At the end of 2020, Montepio’s total assets amounted to 17.94 billion euros, comparing favourably with the figure of ba17.74 billion euros as at 31 December 2019.
The growth in the loan portfolio was achieved “simultaneously with the improvement in credit quality indicators, which benefited from a rigorous credit risk-taking discipline, and the measures that were approved and adopted in the credit monitoring and recovery areas”.
According to Montepio, the quality of the loan portfolio, assessed by the proportion of non-performing assets (NPE) over total loans, evolved favourably, with the NPE ratio decreasing from 12.2% at 31 December 2019 to 10.4% at the end of 2020.
The coverage of non-performing assets by impairments – reflecting the reinforcement of impairments achieved in 2020, with emphasis on that resulting from the updating of macroeconomic scenarios due to the pandemic determined by covid-19 and the increase of impairments in some exposures – recorded an improvement from 52.1% at 31 December 2019 to 60.4% at the end of 2020, it adds.