BCP profit sinks 80% to €12 million

  • ECO News
  • 26 July 2021

The Portuguese bank set aside €214 million for legal risk on CHF loans in Poland and recorded restructuring costs of around €87 million, which penalised BCP's results in the first half.

BCP’s profit fell more than 80% to €12.3 million in the first half, with results being penalised by the reinforcement of provisions for legal risk on CHF loans in Poland and restructuring costs.

As for provisions for the so-called “Francowicze” case, the bank has set aside €214.2 million to face possible contradictory rulings from Polish courts. The bank in Poland announced this Monday morning losses of €112 million.

In relation to the restructuring process, which will involve the departure of hundreds of workers, the bank mentions costs of around €87 million.

BCP said that profit before impairments and provisions rose 5.1% to €530.9 million.

Profit falls, but business grows

Although profit fell significantly, the bank’s revenues grew significantly, with core income rising more than 26% to €1.12 billion. Net interest income grew 5.3% to €768.2 million, and commissions jumped 21% to €352.6 million.

Miguel Maya spoke of “stability of the financial margin” despite the pressure of the European Central Bank’s rates, and highlighted the divergent behaviour between the positive evolution in Portugal and the unfavourable evolution in Poland.

Operating costs rose almost 8% to €591.8 million due mainly to the non-recurring restructuring cost of €87 million.

The bank’s balance sheet also grew with more deposits (up 7.1% to €69.6 billion) and more credit to the economy (up 4.1% in net terms to €55.9 billion).

Non-performing loans down

In terms of the quality of the credit portfolio, BCP recorded “a generalised improvement in indicators: the cost of risk fell”, with CEO Miguel Maya speaking of a “return to normality” after the rise recorded with the pandemic. The ratio of non-productive exposures (NPE) fell from 7% in June 2020 to 5.2% in June 2021.

In terms of the number of employees in Portugal, the institution has 6,937 people on its staff, 217 less than a year ago. It also has fewer branches: it closed 35 and now has 458 branches.