Aggregate profits of major banks up 54% to 919M in Q1

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The aggregate profits of the five largest banks operating in Portugal increased 54% to 919.3 million euros in the first quarter, according to Lusa accounts, a result benefited by the increase in interest rates on loans.

On Monday, BCP was the last of the big banks to present results, having made a profit of 215 million euros, up 90% compared to the first quarter of 2022.

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

Novo Banco, on the other hand, had profits of 148.4 million euros between January and March, 4% more than in the same quarter of 2022. Net interest income grew 85% to 246.3 million euros.

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

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

This year the banks’ profits are benefiting from high interest rates on loans and slowly rising interest rates on deposits, which has benefited the net interest margin, since 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 CEOs of the major banks have considered that the rate increase is about “normalizing monetary policy” after the rates have been very low in recent years, but at the same time the banks have also taken measures to restructure the loans of customers in difficulty (under the government’s decree law or not) so that they do not default.

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