In a statement released to the Portuguese Securities Market Commission (CMVM) today, CGD reported that its earnings for this semester exceeded those of the same period in 2024 by four million euros, benefiting from a business volume increase of nine billion euros and a lower-risk balance sheet.
The financial margin fell by 10% (143 million euros) compared to the same period last year, totaling 1.283 billion euros, attributed to the declining interest rates, but it shows stabilization in comparison to the first quarter, according to the public bank.
The consolidated business volume reached 169 billion euros, spurred by a nine billion euro growth in Portugal, compared to June 2024.
Regarding commission results, CGD noted an increase of “only 0.4%,” below the 5% growth in business volume, since “as in the previous two years, it maintained its pricing and applied exemptions in various operations in Portugal.
In the first semester, the credit portfolio to clients increased by 2.3 billion euros with “robust growth” both in the corporate and institutional sectors (one billion euros) and among individuals (1.3 billion euros), including approximately 1.2 billion euros in housing loans and 100 million euros in consumer credit.
The bank also indicated that new housing loans reached 2.6 billion euros for the semester, surpassing the previous year’s period by over one billion euros, marking a 63% growth.
During this period, CGD recorded a recurring efficiency ratio (‘cost-to-income’) of 29%, while provisions and impairments for credit risks decreased by four million euros, and other provisions fell by 138 million euros, influenced by a 127 million euro increase in 2024 associated with the pension fund transfer compensation mechanism.
“The macroeconomic context and the low value of overdue credit continued to provide conditions for the reduction of provisions and impairments during the period,” the statement read.
The public bank further highlighted that the dividend of 850 million euros paid last May “was the highest ever,” totaling 3.35 billion euros in dividends distributed since 2017.
By the end of June, CGD presented capital ratios of 20.9% (CET1) and 21.0% (total), including the net result for the period deducted from the 2024 dividend and the payout calculated for the first semester of 2025.
The strong organic capital generation of 6.85 billion euros since recapitalization is “equivalent to 1.7 times the amount received from the shareholder.”
The NPL ratio (‘Non-Performing Loans’) stood at 1.47% in the first semester, “resulting from the sustained reduction of overdue credit and the orientation of new credit towards the best risk classifications.”
The credit risk cost was -0.32%, “reflecting the favorable evolution of credit quality due to the improved macroeconomic scenario,” and exposure to non-core assets (NPL, real estate, and restructuring funds) decreased by 84 million euros during the semester.
CGD’s recurring consolidated operating costs increased by 27 million euros (+6%) compared to June 2024.
The investment in technological transformation and improving customer service is cited as the cause of increased general administrative expenses (+23 million euros) and in depreciations and amortizations (+4 million euros).
Meanwhile, recurring personnel costs rose by 800 thousand euros (+0.3%) compared to the previous year.
[Updated at 12:07 p.m.]
