Portugal's Millennium bcp's profit rises 15%, beating forecasts

By Sergio Goncalves

LISBON (Reuters) - Portugal's largest listed bank, Millennium bcp, said on Wednesday its first-half consolidated net profit rose by a larger than expected 15% on the back of stronger income at home and a global reduction in impairments and provisions.

It posted a net consolidated profit of 485.3 million euros ($525 million), above the average forecast of 417 million euros in an LSEG poll, as net income at its domestic business rose by 16.2% from a year ago to 411 million euros.

Its 50%-owned Polish unit, Bank Millennium, on Friday reported a net profit of 357 million zlotys ($90.14 million), flat from a year ago, despite 376 million euros in costs related to its portfolio of Swiss franc-denominated mortgage loans.

Still, Millennium bcp said consolidated loan impairments fell 33% to 97 million euros in the first half, while total impairments and provisions dropped 29% to 390 million euros.

The bank, which also has operations in Mozambique and Angola, said total non-performing exposures were reduced by 8% to 1.97 billion euros.

Chief Executive Miguel Maya told a press conference that it had been the best first-half for the lender in at least 10 years, with 2024 goals already "generally exceeded", allowing the lender to work on new targets that should be announced in October.

Consolidated net interest income (NII), a measure of earnings on loans minus deposit costs, rose 1.7% to around 1.4 billion euros, driven by its international operations, compared to 1.27 billion euros forecast by analysts.

NII at home fell 4.8% to 673.3 million euros, but Maya said margin pressure in Portugal reflects the convergence towards what he called a new normal with which he is comfortable.

Portuguese banks' margins have started to be squeezed after benefiting from a period of high euro zone interest rates when they could charge more for loans without increasing deposit rates by as much.

Maya said capital ratios were now very strong as Common Equity Tier1 (CET1) fully-loaded rose to 16.2% from 14% a year ago, above the minimum requirement of 9.41%.

($1 = 3.9607 zlotys)

($1 = 0.9245 euros)

(Reporting by Sergio Goncalves; editing by Andrei Khalip, Kirsten Donovan)