In the first quarter, the bank set up impairments of €27.7 million, including €26 million to address possible credit problems.
Portugal’s Novo Banco made a profit of €148.4 million in the first quarter of this year, up 4% compared to the same quarter in 2022, the bank said in a statement on Friday.
Between January and March, net interest income increased by 85% to €246.3 million, which, the bank said, was helped by the “favourable environment” of interest rates with effects on the loan portfolio, as this is “mostly indexed to variable interest rates”.
Operating costs rose 8% to €111.9 million, reflecting the effects of inflation, the bank said. Staff costs rose 4.6% to €58.3 million.
Also in the first quarter, the bank set up impairments of €27.7 million, including €26 million to address possible credit problems.
At the end of March, Novo Banco had 4,105 employees, 15 more than at the end of last December, and 292 branches, the same as at the end of 2022.
Novo Banco was created in August 2014, at the time of the resolution of Banco Espírito Santo (BES), held by the bank resolution fund. In 2017, 75% was sold to the US investment fund Lone Star, which paid no price, having injected €1bn.
In that sale, a mechanism was agreed upon whereby the Resolution Fund recapitalises Novo Banco until 2026, with a limit of €3.89 billion, for losses on assets affecting capital ratios.
Under this agreement, Novo Banco has already received €3.405 billion of public money.
However, there are still disputes between Novo Banco and the Resolution Fund (already in arbitration court) that may lead to more money being put in, although with reference to 2022 (the year in which it made a profit of €560.8 million), it has not requested a new injection of capital.
In a statement released today, the bank said it considers that there are amounts owed to it by the Resolution Fund for 2020 and 2021 and that it is carrying out “the legal and contractual mechanisms at its disposal to ensure receipt of them”.