BCP invests in Portuguese sovereign bonds

The Portuguese clearing bank Millennium bcp has invested €1Bn in the country’s sovereign bonds. By the end of March it has increased its exposure to bonds by 29% to €4,698Bn.

The bank led by Nuno Amado bought up nearly €1Bn more in government debt than for the same period last year, +29% since the end of 2017.

The bank’s results for Q1 published on Monday showed that by the end of March, BCP held €4.696Bn in sovereign bonds – an increase of €1.060Bn (29%) compared to the €3.696Bn in bonds held at the end of December.

Banks often increase their investment exposure to government bonds when business confidence returns in a period of recovery, particularly after ratings agencies improve a country’s rating.

“Portugal’s positive macroeconomic performance, a partial reversal in overall international interest rates and an accommodating monetary policy from the European Central Bank have all contributed to maintaining Portuguese sovereign debt yields” stated the bank.

The increase in exposure to national debt was via investment in treasury bonds while the bank reduced its exposure to treasury bills  (by €499 million). BCP ended the first quarter of the year  with €4.197Bn in sovereign bonds, in other words, +38% when compared with the €3.051Bn that it held at the end of December.