CGD bank charges soar 14%

Portugal’s largest bank, Caixa Geral de Depósitos (CGD) is back in profit, making €68 million partly on the back of bank charges.

 

The bank’s president, Paulo Macedo, said on Thursday that the state-owned bank had finally recorded a profit in the first quarter as a result of a positive performance in Portugal.

“There has been a growth in commissions in region of 6% levied from banking service charges in Portugal, we’ve slashed costs by 11%, all of which means that our core business has grown 27% like-for-like,” said the former government health minister and tax expert.

In terms of assets quality, there was a reduction in Non-Performing Loans (NPL) by €600 million while Caixa plans to do better than outlined in the bank’s Strategy Plan for 2018.

Looking ar ratios “capital continues to be robust” with Tier 1 Common Capital Ratio (CET1) at 13.6% in the first three months of the year.

“In any case, compared to 2017 there was a reduction due to the coming into force of IFRS9 – an International Financial Reporting Standard – which addresses the accounting for financial instruments, the impairment of financial assets and hedge fund accounting. Excluding this, values continued ti be robust.

In terms of Return on Equity (ROE) “we are confident that we can achieve 5% this year and 9% in 2020”, he said.

CGD is Portugal’s second largest bank. Founded in Lisbon in 1876, it has a presence in 23 countries and is the 69th largest European bank.

In 2009 the bank was given cash injections by the Government during the international banking crisis. In 2016 the bank was in crisis again after the board of directors resigned after the bank required another bailout. Over 2,500 jobs will be axed to 2020.