LISBON, Oct 27 (Reuters) - The CEO of Portugal’s largest private bank, Millennium bcp said on Tuesday he was confident the bank would not require more capital to deal with the consequences of the coronavirus pandemic.
Portuguese authorities in March said bank customers could suspend loan repayments, in a move aimed at relieving pressure on businesses and individuals during the pandemic. The moratorium has been extended until September 2021.
“There will certainly be an increase in impairments, but I am absolutely convinced that Millennium bcp will not need any capital increase to deal with the challenges that lie ahead,” Millennium bcp’s CEO Miguel Maya said at a banking conference.
“I dismiss this scenario totally,” he said.
Millennium bcp reported in July a 55.3% drop in first-half net profit to 76 million euros ($89 million) with provisions and impairments increasing 44.5% to around 351 million euros after costly provisions to offset the economic impact of the coronavirus outbreak.
The bank approved more than 123,000 moratoriums on repayments of bank loans to support families and businesses hit by the pandemic.
But its fully implemented Tier 1 common equity (CET1) capital ratio stood at 12.1%, comfortably above the required 8.8%.
Maya acknowledged that the crisis was accelerating bank mergers across Europe, but dismissed the idea that that might be on the cards for Millennium bcp.
“Unlike the past, my main concern is not the size, it is the quality of customer service, it is automation, it is the creation of conditions to be able to be competitive,” he said.
Portugal’s banking industry is highly concentrated, with the five largest banks accounting for over 80% of credit and deposit volumes.
Millennium also operates in Poland, Angola and Mozambique. (By Sergio Goncalves, Editing by Victoria Waldersee and Susan Fenton)
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