The five largest banks operating in Portugal reported profits of 3.903 billion euros up to September, marking a decrease of 0.33% year-on-year.
The cumulative profits of Caixa Geral de Depósitos (CGD), Santander Totta, Millennium BCP, Novo Banco, and BPI fell by 12.8 million euros compared to the 3.916 billion euros recorded a year earlier.
This trend continued to be influenced by the net interest margin, which is the difference between the interest charged on loans and the interest paid on deposits, totaling 7.101 billion euros among these five banks in the first nine months.
Compared to the same period last year, this represents a decline of 501 million euros, or 7.1%, impacted by changes in European monetary policy.
Among the five banks, BPI and Santander experienced a reduction in profits by 12.3% and 6.4%, respectively, to 389.3 and 728.2 million euros.
Their presidents attributed this to the reduction in the net interest margin and the impacts of reduced interest rates.
Novo Banco’s profits remained almost unchanged at 610.5 million euros (an increase of 100,000 euros).
Conversely, BCP saw its net income rise by 8.7% to 775.9 million euros.
The public bank’s increase of 2.2% to 1.399 billion euros was partly due to the reversal of provisions and impairments, totaling 119 million euros, compared to the establishment of 91 million euros a year earlier.
Monetary policy aimed at controlling inflation after the Covid-19 pandemic, further exacerbated by the Russian invasion of Ukraine, ultimately achieved its goal, with the inflation rate reaching 2.1% in October, according to Eurostat, aligning with the European Central Bank’s (ECB) target.
As observed at the end of the semester, with the easing of interest rates, net interest margins have reflected this trend, declining in four out of the five banks, with BCP being the exception.
Up to September, BCP’s net interest margin grew by 2.6% to 2.166.6 million euros, driven by international activities, which grew by 5.8% against a 0.9% contraction in domestic operations.
In the first semester, the net interest margins of BPI and CGD fell by 10.8% and 9.7%, respectively, to 659 million euros and 1.916 billion euros, while Santander recorded a drop of 17.3%, to 1.030 billion euros.
Novo Banco saw its net interest margin decrease by 6.5% to 829 million euros.
The value of fees charged up to September rose by 2.95% year-on-year to 1.926 billion euros, with the largest shares belonging to BCP (629 million euros, a 4% year-on-year increase) and CGD (439 million euros, a 0.5% increase).
Santander’s fees rose by 5.9% to 365 million euros, and Novo Banco’s by 10.7% to 266 million euros.
Conversely, due to an exceptional situation impacting fees the previous year, BPI reduced the fees charged by 6.9% up to September, totaling 227 million euros.
Bankers have noted that these increases have been more driven by increased customer activity than by an increase in rates.
Regarding workers and branches, the five biggest banks in the sector employed 25,401 people and had 1,824 branches nationwide. Year-on-year, this represents 185 fewer workers and nine fewer branches.
As of the end of September, Millennium BCP was the bank with the most employees (6,224), followed by CGD (5,962), Santander (4,674), BPI (4,430), and Novo Banco (4,111).
Year-on-year, this reflects a decrease in the number of employees at CGD (-265), Novo Banco (-138), and BCP (-51), and increases at BPI (175) and Santander (94).
In terms of branches, these banks had 1,824 locations at the end of the nine months, a net reduction of nine.
Caixa remained steady at 512 as a year ago, Santander, BPI, and Novo Banco reduced the number of branches by two, to 327, 302, and 289, respectively, while BCP had three fewer locations than a year earlier (394).
