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• Income Growth: Increased by 8.8%, reaching nearly EUR606 million.

• Net Income (Bank Millennium): Increased by over 18%, amounting to EUR127 million.

• Capital Ratios: CET1 at 16.5% and total capital at 20.8%, with increases of 219 and 225 basis points respectively.

• Customer Funds: Increased by 9%, exceeding EUR100 billion.

• Non-Productive Assets Reduction: Decreased by EUR92 million in NPS and EUR60 million in foreclosed assets.

• NPL Ratio: Reduced to 3.5% with total cash coverage of approximately 80%.

• Customer Base Expansion: Grew by 4%, surpassing 6.9 million customers.

• Mobile Customers: Increased by 11%, representing 71% of the customer base.

• Operating Costs: Increased by around 11% due to inflation, particularly in Poland.

• Net Interest Margin (NIM): Above 3%, with international operations exceeding 4.5%.

• Cost of Risk: Improved, remaining below 50 basis points.

• Return on Equity (ROE): Projected to be above 13.5% over the strategic plan period.

• Shareholder Distribution: Up to 75% through dividends and share buybacks, subject to regulatory approval.

• Warning! GuruFocus has detected 5 Warning Sign with BPCGY.

Release Date: October 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Banco Comercial Portugues SA (BPCGY) reported an 8.8% increase in income, reaching nearly EUR 606 million, showcasing the profitability and efficiency of its business model.

• The bank's net income from its Mozambique operations remained strong at EUR 64 million, confirming the quality and profitability of this franchise.

• Bank Millennium's net income increased by more than 18%, amounting to EUR 127 million, despite significant costs associated with FX mortgage loans.

• The bank achieved a solid capital position with capital ratios comfortably above regulatory requirements, including a CET1 ratio of 16.5% and total capital at 20.8%.

• Customer funds increased by 9%, exceeding EUR 100 billion, supported by strong commercial skills and a competitive retail banking business model.

Negative Points

• Banco Comercial Portugues SA (BPCGY) faced substantial costs related to FX mortgage loans, amounting to EUR 550 million in the first nine months.

• The extension of mortgage moratoriums resulted in costs of EUR 36.66 million, although below the provisioned amount.

• Operating costs increased by around 11% due to inflation, particularly in Poland, impacting core operating profit, which decreased by around 4%.

• The bank's cost of risk remains a concern, although it has improved, it is still a significant factor in the overall business model.

• The competitive landscape for deposits is increasingly challenging, which could impact future profitability and growth.