Montepio profits of €24 million downgraded to €6.4 million
A discrepancy has erupted over the financial results of troubled Portuguese bank Montepio.
The former CEO of Caixa Economic Montepio Geral, Félix Morgado, had announced profits of €30.1 million in 2017 which compared favourably to the bank’s €86.5 losses in 2016.
In February 2018 José Félix Morgado argued that the bank had turned the corner thanks to favourable developments in the bank’s products, the recovery of its core business and a reduction in operational costs and impairments (losses).
In April, Carlos Tavares, the bank’s new CEO and administration downgraded Caixa Económica Montepio Geral’s results to €6.4 million. An official source at the bank stated: “The current board responsible for signing off the accounts has, after a thorough audit, reviewed the accounts according to its own criteria of prudence.”
At the end of April Caixa Económica announced it would delay releasing results by two weeks. On Tuesday, 15 May the accounts were finally published by the Portuguese markets commission (CMVM) showing profits of €6.4 million and not €30.1 million – a difference of €24 million.
Carlos Tavares states that with the “criteria of prudence” the amount of impairments (a reduction in asset values) rose €138 million to €160.7 million.
Although Carlos Tavares reviewed the figures downward, in terms of solidity, the bank’s Tier 1 Common Equity ratio increased from 10.4% to 13.2%, which means that Montepio does not “need a fresh capital injection”
On the bank’s future, Tavares, the former President of the CMVM, outlined its main priorities which are recovering credit levels and reducing its exposure to the real estate market at a propitious time to offload non-performing property assets.