Banco Montepio shifts from loss to profit in H1

Banco Montepio posted a consolidated net profit of €23.3 million in the first half of the year, compared to losses of €33 million in the same period of 2021, it announced on Monday.

In a statement released today, Banco Montepio said the results show “the progress recorded by the banking product, with emphasis on net interest income and commissions, by the reduction in operating costs, as well as by the lower appropriations for impairments and provisions, in particular, those related to credit risk”.

Core banking product, corresponding to the aggregate of net interest income and commissions, evolved favourably between the first half of 2021 and that of 2022, recording a positive variation of 6.5%, it said.

Montepio said core banking product rose by €11 million in the first half of the year compared to the same period in 2021, with net interest income up 5.6% (to €120.6 million) and commissions up 8.6% (to €59.6 million).

Loans and advances to customers (net of impairments) totalled €11,921 million at the end of June 2022, up €253 million or 2.2% on the figure recorded at the end of 2021.

Customer deposits amounted to €13.036 billion on 30 June 2022, representing an increase of €249 million or 1.9% from the €12.787 billion recorded at the end of 2021, with the individual customers segment accounting for 73% of the total.

In the statement, Montepio also said that the liquidity buffer, corresponding to the aggregate amount of the balance sheet item cash and balances at Central Banks and the market value of assets eligible for obtaining liquidity from the ECB, stood at €3.8 billion, reflecting “a comfortable position of liquidity ratios”.

The bank also emphasised that in the first half of the year, compared to the same period of 2021, there was a 16.4% reduction in non-productive exposures (NPE) and a 4.5% increase in the number of active customers in digital channels.

Regarding asset quality, the cost of credit moved to 0.1% in the first six months of this year from 0.9% at the end of the same period of 2021.

Regarding operational adjustment, the bank highlighted a reduction in operating costs of €8 million or 6.1% in the period under review, which “materialised in the decreases in staff costs, general administrative expenses and depreciation and amortisation”.

Also, in the context of this adjustment, the bank mentioned that in the first months of this year, it closed 17 branches compared to the same period in 2021 (-6.3%) and that the Banco Montepio Group’s workforce was reduced by 192 employees or 5.2% compared to the end of June 2021.