Lisbon, March 6, 2025 (Lusa) - Portugal's Novo Banco made a profit of €744.6 million in 2024, just 0.2% more than in 2023, it said in a statement on Thursday.
Although profits only increased by €1.5 million (€744.6 million in 2024 compared to €743.1 million in 2023), the net results for 2024 are the highest ever for the bank created in 2014 to take over part of Banco Espírito Santo's (BES) business when it was resolved.
In its information to the Portuguese Securities Market Commission (CMVM), Novo Banco justifies the increase in profits with ‘a consistent and diversified business model, despite the one-off costs of the financial year, and driven by robust franchising of loans to companies and low-risk housing loans and high digital adoption’.
It also announced that a dividend of €224.6 million will be proposed to the general meeting of shareholders (the Lone Star fund owns 75% of the bank and the Portuguese state 25%).
In the document with the strategic update released to the market today, the bank says it has ‘’€3.3 billion of capital available for distribution over the next three years‘’.
Novo Banco closed 2024 with a CET1 capital ratio of 20.% (already considering the dividend of €224.6 million), which it considers to be an "overcapitalised balance sheet." This indicates a prospect of greater dividend distribution in the coming years when it becomes known that Lone Star wants to sell the institution.
According to public information, the aim is to sell part of Novo Banco's capital (25% to 30%) on the stock exchange. A direct sale is also not ruled out, according to information gathered by Lusa.
In 2024, Novo Banco's net interest income (the difference between interest charged on loans and interest paid on deposits) rose by 3.2% to €1.179 billion and commissions increased by 9.1% to €323 million.
Operating costs rose by 4.2% to €499.2 million, with staff costs increasing by 7% to €270.4 million.
At the end of 2024, the group had 4,195 employees, 14 fewer than in 2023, and kept the network stable with 290 branches.
Impairments and loan provisions fell by 32%, with €96.9 million allocated to this item.
Impairments for ‘other assets and contingencies’ increased to €91.5 million. The latter includes, among other things, the provision for the ongoing restructuring process (which involves technological investment, internal reorganisation and the departure of workers, especially older ones on early retirement and termination by agreement) and a provision (of €17.8 million) relating to property taxation.
Loans to customers (gross) grew by 3% to €29.015 billion, with loans to companies virtually stable at €13.891 billion and mortgage loans up 1% to €10.158 billion.
The non-performing loan ratio (NPL ratio) fell from 4.4% in 2023 to 3.3% in December 2024.
Deposits increased by 5.7% to €29.754 billion, a growth that the bank attributes mainly to corporate savings.
Novo Banco was created in the summer of 2014, when BES was resolved, to take over part of its banking activity. The bank's Resolution Fund is a shareholder.
In 2017, 75% of the bank was sold to the US fund, in an agreement that included a contingent capital mechanism whereby, until the end of 2025, the Resolution Fund compensated Novo Banco for the ‘toxic’ BES assets it had been left with.
Under this agreement, the Resolution Fund injected more than €3 billion into the bank, in a process that has caused many public and political controversies over the years.
In December 2024, the Resolution Fund and Novo Banco agreed to an early end to the contingent capitalisation mechanism, with the parties withdrawing from legal disputes. This agreement allows Novo Banco to pay dividends to shareholders and facilitates the bank's sale.
IM/ADB // ADB.
Lusa
