BNU posts big increase in business

Banco Nacional Ultramarino achieved a 31.3 per cent increase in its business volume for the first quarter, contributing 46.75 per cent of the total international contributions of its shareholder Caixa Geral de Depósitos (CGD) – a Portuguese state-owned bank – according to CGD’s first quarter report. Of the approximately US$44 million (MOP394.4 million) total of international contributions – a year-on year increase for the quarter of 79 per cent – to CGD, BNU contributed US$20.87 million. Of the international European contributions to CGD, the group’s French and Spanish operations saw the largest growth – at 14.2 and 3.6, respectively – amounting to increases of 498 million euros and 107 million euros. Asia BNU’s operations grew 284 million euros, representing a 10.6 per cent increase compared to the same quarter last year. The group’s African operations saw an 11.2 per cent drop compared to the same period last year. The group noted that they ‘continue to develop a strong commitment in its activities backed by the international platform of the CGD Group for the development of relationships with internationalized clients in these markets as well as the increase of external commercial negotiations,’ states the group in its report. Local bank BNU saw operating income for the quarter amounting to MOP285.6 million – corresponding to a 20.4 per cent increase compared to the first quarter of last year, despite registering a 3 per cent increase in costs and earning the group an efficiency ratio for the period of 29.2 per cent, compared to 34 per cent for the first quarter of 2015. Statutory accounts totalled MOP187.1 million before taxes, a 20.3 per cent increase, while net income saw a 35.3 per cent increase to MOP164.6 million. CGD reeling Overall for the quarter, the net results reached negative values amounting to US$83.26 million, compared to a profit of US$2.36 million seen in the same quarter last year. Client resources amounted to 73.94 billion euros, a 3.9 billion euro increase compared to the first quarter of last year. Financial operations, which saw a profit of US$105.7 million in the first quarter of 2015, dropped to a loss of US$109.19 due to ‘high volatility felt in financial markets internationally’. In 2016, liquid commissions decreased 8.5 per cent to US$129.72 million, as a result of ‘strong competition and regulation on commission collecting,’ while maintaining a financial margin of US$315.9 million, with a 9.8 per cent growth year-on-year, the group stated. This growth highly benefited from a 20.7 per cent and 10.6 per cent decrease in funding costs and interest rates for active operations, respectively. However, the first quarter of 2016 saw a significant decrease due to hedging operations on interest rate risks for Portugal’s public debt, according to news agency Lusa. ‘Income from financial operations were particularly affected in the quarter by the climate of instability in the financial markets and increased risk aversion, in the context of strong uncertainty regarding economic growth prospects at an international level,’ the group stated. In 2012, in order to recapitalise the CGD, the Portuguese Government invested US$840 million directly in bonds and US$1 billion in contingent capital, investments the CGD as a state-owned bank still pays annual interest on, according to Lusa. Until now CGD hasn’t repaid the debt and no deadline was provided for the payback, with the contingent capital turning into bonds if no payment is made until 2017, notes the newswire. The Portuguese Government is currently discussing with the European Commission if the government, as sole CGD shareholder, should increase capital in the bank, but the European Union authorities consider any capital raised by the Portuguese state as aid for the bank, which would imply a new restructuring of CGD, could lead to budget and personnel cuts, Lusa reported.