Montepio with €86 million losses

The mutual bank Montepio registered a consolidated loss of €86 million in 2020 after a €9 million profit the year before.

The members of the Montepio General Mutualist Association (Associação Mutualista Montepio Geral) will meet at an extraordinary meeting on 30 September to discuss the bank’s financial results and a fiscal council report regarding the results for 2020.
In 2020, the net consolidated results for MGAM were €-86 million, an amount well above the €-18 million losses recorded at an individual level, mostly down to the extraordinary effects of the pandemic on the net results of Banco Montepio (€-81 million). This resulted from extraordinary sums of credit impairments, among other adverse effects suffered by the bank led by Virgílio Lima.
However, the mutual institution’s insurance arm had a better year in 2020 than in 2019 rising to €6 million when in 2019 they were €-12 million.
Montepio Asset Management improved its losses from €-206,000 in 2019 to €-2020. It is also evident from the financial report that the number of members fell in 2020 (598,438) compared to 2019 (601,784).
The report also showed that the institution had 5,115 staff at the end of 2020 of which 3,721 worked at Banco Montepio. The banking arm which is headed by Pedro Leitão has a plan to slash staff numbers from between 600 and 900 staff by September 2023 with the bank being designated ‘a company under restructuring’ with an eventual limit of 400 staff.
Montepio’s assets rose slightly to €20.8 million while its own capital fell €196 million in 2019 to around €95 million in 2020 affected by the negative results.
The Portuguese State could enter with a share of Banco Montepio’s capital because of deferred tax credits under a 2014 special regime. Under this regime the recovery of assets by deferred taxes is not dependent on future profits.