Montepio returns to profit

Portuguese mutual bank Montepio has registered profits of €6.6 million for 2021 after recording losses in 2020 of €80.7 million.

The bank informed the market via the Portuguese stock market commission CMVM on Thursday.
“This favourable development is supported by an increase in financial margins and commissions and an reduction in operational costs, as well as lower allocations needing to be set aside for impairments and provisions, particularly those related to credit risk”, explains the bank.
With decisions to promote “core activities”, credit to clients (net impairments) totalled €11,707 million on 31 December, 2021, up €126 million on the amount registered at the end of 2020. Customer deposits saw a positive result of €285 million, to €12,787 million at the end of 2021.
In terms of operational adjustments, there was a 4.8% reduction in operational costs “excluding one-off impacts related to the staff adjustment programme. In 2021, 37 branches were closed and 243 staff were made redundant with early retirement and amicable redundancies representing 83% of these cases.
As to credit impairments in 2021, which considered the analysis carried out on the credit portfolio for both personal and company loans, these totalled €54.3 million, “with a risk cost of 0.4% that compares favourably with the value of impairments of €185.1 million with a risk cost of 1.5% registered in 2020”, states Banco Montepio. Its ratio of Non Performing Exposures (NPEs) fell to 8.6% “confirming a sustained reduction in non-productive exposures (Non-Performing Loans) since 2015.
Montepio announced recently that it planned to sell a portfolio of NPLs and properties on its books worth €1.4Bn through a operation led by the Japanese bank Nomora, starting with a €500 million tranche, after selling a €253 million portfolio of NPLs at the end of 2021.