LISBON (Reuters) – Portugal’s largest listed bank Millennium bcp on Monday reported a 84% drop in first-half net profit after taking big provisions on foreign currency loans at its Polish subsidiary.
The bank reported a profit of 12.3 million euros ($14.52 million) in the first half, down from 76 million euros during the same period last year, it said in a statement.
Loan impairments fell by 34% to around 157 million euros between April and June, compared with a year ago, but other impairments and provisions surged 167% to 304,9 million euros, the bank said.
Poland’s Bank Millennium, half owned by Millennium bcp, reported a second-quarter loss of 112.7 million euros earlier on Monday, after taking provisions of around 231 million euros for legal risks related to its portfolio of foreign currency mortgage loans.
Millennium bcp said operating costs increased 7.9% to 591.8 million euros after it spent around 87.2 million euros in one-off restructuring costs in Portugal in the first half. Recurring operating costs fell 4.3%.
CEO Miguel Maya said the bank continued to operate in a very complex context caused by the Covid 19 pandemic, but it showed “resiliency.”
Millennium bcp said net interest income, a measure of earnings on loans minus deposit costs, rose 0.7% to 768.2 million euros compared with the previous year.
“Our net interest income is very stable despite the environment of very low interest rates,” Maya said.
The bank – which also has operations in Angola and Mozambique – said it reduced non-performing exposures by 24% to 3.0 billion euros in June compared with the same month last year.
($1 = 0.8469 euros)
(Reporting by Sergio Goncalves. Editing by Jane Merriman)
