LISBON (Reuters) - Portuguese lender Millennium bcp (BCP.LS) reported a 77% decline in first-quarter net profit to 35.3 million euros ($38.6 million) on Tuesday following its provisions to offset the economic impact of the novel coronavirus.
The outbreak is set to dent Portugal’s economy, with the International Monetary Fund expecting gross domestic product to contract by 8% this year, above the European Commission’s predictions of a 6.8% drop.
“Predictions (...) all show we are in a serious recession,” the bank’s chief executive Miguel Maya said. “We are at a time of many uncertainties, we are working with a lot of market volatility and pragmatism is required to ensure we are able to adapt our strategy.”
The provisions implemented by Portugal’s largest listed bank to cope with the impact of the coronavirus cost nearly 79 million euros, it said in a statement without detailing the provisions.
Although the outbreak affected the bank’s net profit, its net interest income rose 6.3% to around 385 million euros during the first three months of 2020, it said.
Millennium also operates in Poland, Angola and Mozambique.
Poland’s Bank Millennium, which is half owned by Millennium, announced last week its first quarter profit fell 89% to 18.1 million zlotys.
Millennium bcp’s largest shareholder is Hong Kong-based investment holding company Fosun, followed by Angolan state oil company Sonangol.
Reporting by Sergio Goncalves; writing by Catarina Demony; editing by David Evans and Barbara Lewis