LISBON (Reuters) - Portugal’s largest listed bank Millennium bcp (BCP.LS) posted a 71 percent jump in first-quarter net profit on Monday, boosted by a strong performance from its domestic operations and a drop in non-performing loans.
Return on equity, a key measure of profitability that has been a weak spot for Portuguese banks since the country’s 2010-13 economic and debt crisis, rose to 6.1 percent from 4.1 percent a year ago.
Net profit reached 85.6 million euros (75.3 million pounds) in the quarter, with the lender’s business in Portugal contributing just over half of the total whereas a year ago it brought in only 9 million euros.
“There is an improvement in profitability ... with a very favourable evolution of results from the activity in Portugal,” CEO Nuno Amado told reporters.
“We already have a lucrative operation capable of generating 1.2 billion euros a year in operating income on a recurring basis, with a strong contribution from Portugal,” he added.
In Portugal, net income was “decisively influenced by the reduction of impairments and provisions”, the bank said in a statement, adding the income from its overseas operations, in Angola, Mozambique and Poland, was stable.
The bank reduced its non-performing exposures (NPEs) by half a billion euros to 6.3 billion, while as a percentage of all loans NPEs fell to 14 percent from 17.5 percent a year earlier. Loan impairment charges fell 29 percent to 106 million euros.
Net interest income - the difference between interest charged on loans and interest paid on deposits - rose almost 4 percent to around 345 million euros.
Its key solvency ratio rose to 11.8 percent at the end of the first quarter from 11.2 percent a year earlier.
Reporting by Sergio Goncalves and Andrei Khalip; Editing by Mark Potter