Combined profits of five largest banks rose 54% to €919.3M in Q1 2023

  • Lusa
  • 16 May 2023

On Monday, BCP was the last of the big banks to present results, posting profits of €215 million, up 90% on the first quarter 2022.

The combined profits of the five largest banks operating in Portugal rose by 54% to €919.3 million in the first quarter, according to Lusa accounts, a result benefiting from the increase in interest rates on loans.

On Monday, BCP was the last of the big banks to present results, posting profits of €215 million, up 90% on the first quarter 2022.

State-owned Caixa Geral de Depósitos (CGD) had profits of €285 million in the first quarter, almost double the €146 million in the first three months of 2022. Helping the public bank’s profits was consolidated net interest income, which more than doubled to €611 million.

Novo Banco, meanwhile, posted profits of €148.4 million between January and March, up 4% on the same quarter of 2022. Net interest income grew 85% to €246.3 million.

Santander Totta had profits of €185.9 million, up 19.6%, with net interest income growing 38.1% to €267.7 million.

Finally, BPI had consolidated profits of €85 million in the first quarter, up 75%, with net interest income rising 82% to €203 million.

This year banks’ profits are benefiting from high interest rates on loans and slow rise in interest rates on deposits, which has benefited the net interest margin, as this is the difference between the interest charged by banks on loans and the interest paid by banks on deposits.

Since the European Central Bank (ECB) began raising key interest rates in mid-2022 to fight inflation, this has had an impact on the increase in bank customers’ loans indexed to variable interest rates (mainly Euribor).

The chairmen of the main banks have considered that the increase in rates is about the “normalisation of monetary policy”, after rates in recent years had been very low, but at the same time banks have also taken measures to restructure the credits of customers in difficulties (under the government decree-law or not) so that they do not default on loans.

On the other hand, in the first quarter, in year-on-year terms, the five main banks in Portugal lost a total of 510 employees, also losing 91 branches, according to the survey conducted by Lusa.

Caixa Geral de Depósitos was, among the financial institutions analysed, the one that most reduced its number of workers, ending the first quarter of the year with 5,787 employees, 298 less than in March last year.

In turn, the number of branches of the public bank fell by 27 to 515.

Santander Totta lost 44 workers between April 1 2022 and March 31 this year, shrinking to 4,677 employees. Its network fell by 10, to 334 branches.

BPI saw its number of employees fall by 100, to 4,386, while the number of branches dropped by 22, to 319.

Novo Banco reduced its workforce by 77 employees and closed 19 branches in the year ending 31 March, concluding the period under review with 4,105 employees and 292 branches.

BCP, which has the largest number of employees, closed the first quarter with 6,273, gaining nine members of its workforce in the last 12 months.

However, the number of the bank’s branches fell by 13 to 408.

As of March 31, the five banks under review totaled 25,228 employees and 1,868 branches, down from 25,738 employees and 1,959 branches in the same period.

In comparison with December 31, 2022, CGD and BPI recorded a lower workforce, losing 50 and 18 employees, respectively, while Santander Totta, BCP and Novo Banco closed the quarter with 33, 21 and 15 more employees, each.

In terms of branches, BPI has six fewer branches and Santander Totta five compared to the end of 2022, while Novo Banco, BCP and CGD maintained the number of branches.