BNU net profit up 9.8 pct y-o-y in 2016

Local banking group Banco Nacional Ultramarino (BNU) describes the ‘highlight’ of its 2016 financial year growth as a 2.1 per cent increase in customer funds, according to its announced results provided to Business Daily.
The results show positive growth in many of the bank’s metrics despite an environment in which the ‘banking business continues to be more competitive,’ notes the group.
Aside from the growth in clients’ funds, in comparison with the group’s 2015 results it registered a 5.2 per cent increase in the number of customers it serves, amounting to 224,398 as at end-2016. According to the most recent data from the Statistics and Census Service (DSEC) for the third quarter of 2016, the estimated population of the MSAR is 647,700 – meaning BNU clients comprise over one-third of the MSAR’s population, at about 34.64 per cent.
Customers also saw an increase in the number of products each uses with the bank, with a 2.3 per cent year-on-year uptick, to 3.49 products per active customer.
The group also points to an increase in the revenues from its China UnionPay card network, which increased 23.5 per cent year-on-year.
‘As a result of the increase in customer loyalty and the increase in cross-selling of products, and despite the strong negative impact resulting from the contraction of the tourism and gambling sectors, card revenues increased by 3.3 per cent,’ notes the group.

Profits up
Of particular note, the group announced that its net profit had increased by 9.8 per cent year-on-year, reaching MOP560.55 million for 2016, as compared to MOP510.33 million the previous year.
This was countered by a 3.2 per cent increase in expenses, which hit MOP302.56 million, which the group notes as due to increases in personnel costs – up 2.5 per cent year-on-year, and employee numbers increasing ‘by about’ 2 per cent. Overall administrative costs increased 4.9 per cent ‘due to the strong containment in the procurement area, despite the existing inflationary pressures in the Territory and the opening of two new branches.’
Regarding the group’s net interest margin, it ‘performed well’ during the year, with a 11.1 per cent year-on-year increase ‘mainly as a result of better optimisation of liquidity management.’

Challenges
The group points out that despite its strong customer loyalty the number of customers increased just 10.1 per cent between December 2012 and the same month of 2016, a consequence of ‘the large Chinese banks seeking to gain market share.’ With 29 other banks in the MSAR to compete with, the group notes that ‘there has been a decline in the profitability of operations and rates practiced in the local market.’
Other challenges in the market, leading to the 3.5 per cent predicted contraction in the gross domestic product (GDP), the group points that ‘at least in part’ the corruption crackdown by the Mainland and ‘the containment of the movement of capital put into China’ as well as the slowing in growth of its economy ‘has indirectly affected Macau as the territory is the gaming capital of the world.’
The company also notes the MICE and retail sectors are ‘gaining importance’ in the local economy but ‘highly dependent on the exterior’ such as tourists from the Mainland
Businesses in Macau are facing ‘greater difficulties […] to obtain human resources and to maintain a stability of their permanence.’
Overall net profit for the group has grown 71.4 per cent between end-2012 and end-2016, accompanied by a 23.7 per cent growth in expenses during the same period. Net interest income increased 80.8 per cent in the same period.
Group CEO Pedro Cardoso notes it plans to open a new branch in Taipa in 2017.