Novo Banco announced on Monday that it had made a net profit of EUR 428.3 million in the first nine months of the year, an increase of 178% compared to the same period last year.
According to a statement from the Securities Market Commission (CMVM), The bank said the increase of more than €274.3 million in the first nine months, compared to the same period last year, demonstrates the “continued growth of the company, demonstrating its ability to generate income and capital, despite the current macroeconomic context, inflationary pressures and rising interest rates”.
In the third quarter of the year, the result amounted to 161.6 million euros, an increase of 30.3% compared to the previous quarter.
For this quarter, Novo Banco justifies the “positive evolution due to the improvement in banking income (+7.1%), control of operating expenses (+0.4%) and a lower level of write-downs and provisions”.
“Commercial banking income reached 209.2 million euros, as a result of the positive evolution of interest rates, which was reflected in the performance of net interest income (+2.5%; +3.4 million euros), which lower customer service performance partially mitigated ( -5.7%; -4.3 million euros),” he says.
Other operating results were positive at 88 million euros, “primarily justified by the capital gain realized on the sale of the head office (71.5 million euros; 67.0 million euros net of unforeseen events)”, and the amount allocated to impairments and provisions totaled 2.7 million euros, “mainly as a result of the reversal of impairments and specific provisions and the normalization of the bank’s balance sheet”.
Still in the first nine months, the bank reports that customer service costs amounted to 215.7 million euros, 3.8% more than in the same period last year.
Commercial banking income amounted to EUR 621.6 million, 2.6% less than in the same period in 2021.
Quoted in the communiqué to the CMVM, Novo Banco’s CEO, Mark Bourke, states that “Business growth in the first nine months of 2022, reflecting the strategy of continued growth of banking activities in Portugal, with increasing income and capital, led to the creation of value for all involved”.
As of September, net interest income was EUR 405.9 million (-5.6% yoy), “due to the improvement in the average interest rate on assets, the costs incurred with the issuance of senior debt in the fourth quarter of 2021 and the conservative interest rate record for TLTRO III in the third quarter of 2022”.
According to the bank, “given the changes to the terms of said financing announced on October 27, 2022, ‘pro forma’ net interest income for the quarter would have been EUR 7.5 million higher”.
“The performance of the activity is in line with expectations for September 2022, despite the current macroeconomic context characterized by inflationary pressures and the resulting volatility in interest rates, exacerbated by the conflict in Ukraine,” said Novo Banco.
In the period, net interest income amounted to 1.29% (1.35% in September 2021) and loans to customers (net) amounted to 24,600 million euros (+3.9% compared to December 2021), “reflecting the growth trajectory of the loan portfolio in the corporate and individual segment, in an environment of favorable interest rates”.
Novo Banco reports that loans to customers “increased in all segments”: Loans to customers (gross) amounted to 25,823 million euros (+3.7% vs. percentage compared to December 2021), 39% for home loans (minus one percentage point) and 5% for consumer credit and others.
Total customer money grew by 3.0% compared to December 2021 and the increase in customer deposits amounted to 4.6% (+1,300 million euros).
In the first nine months of the year, Novo Banco’s non-performing loans (NPL) ratio was 5.0% (down from 5.7% in December 2021) and its funding ratio increased from 71.4% to 77.2 %,” in line with the de-risking strategy and approaching the average ratio of peers [pares] Europeans”.
The cost-to-income (efficiency ratio) was 51% (48% in the same period last year), corresponding to 49% on a recurring basis, with a total operating expenses of 314.2 million euros (+2.8% year-on-year). years), “where the reduction in personnel costs is offset by the one-off increase in general and administrative costs and depreciation and amortization that support the investment in improving operational and business processes”.
Until September 30, 2022, the Novo Banco group recorded a strengthening of impairments and provisions for an amount of 22.5 million euros (-85.9% compared to the same period last year) and the cost of risk amounted to 20 basis points (61 basis points as of September 2021), “benefit from the portfolios’ risk reduction strategy”.
As a “reflection of the positive result development”, Novo Banco had a CET 1 ratio of 12.7% on September 30, 2022 (+90 basis points compared to 11.8% in June 2022) and a total solvency ratio of 14.9% ( +100 basis points compared to 13.9% in June).
Regarding the 2020 amount requested by Novo Banco from the Resolution Fund, the bank says there are “two differences resulting from differences” between the two institutions: one related to the provision for discontinued operations in Spain and the others relating to the valuation of units subject to an arbitral award.
“Novo Banco considers these amounts (165 million euros) to be due under the contingent capitalization mechanism and activates the legal and contractual mechanisms available to it to ensure their receipt,” he says.
In addition, “Subject to arbitration, Novo Banco and the Resolution Fund still have at the end of 2020 the application by Novo Banco of the dynamic option of the transitional regime of IFRS 9”.
Novo Banco with 223 fewer employees and 34 branches in September compared to 2021
At the end of September, Novo Banco had 223 fewer employees and 34 branches less than a year earlier, reducing personnel costs by 5.7% to 169.8 million euros, the institution announced today.
“Staff costs totaled 169.8 million euros (-5.7% change vs. 9M21), maintaining the downward trend observed in recent years as a result of the implemented efficiency measures,” said Novo Banco in a statement. to the Securities Markets Commission (CMVM) with group results for the first nine months of this year.
According to the bank, as of September 30, 2022, the Novo Banco group had 4,139 employees (223 fewer than a year earlier and 54 fewer than the end of 2021) and 300 branches (34 fewer than in September 2021). less than in December).
Of these 300 locations, 205 were “transformed under the new distribution model, providing an integrated digital and customer experience”.
News updated at 11:47
Source: DN
