Earnings Release • Feb 2, 2022
Earnings Release
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Porto, 02 February 2022
o Consolidated net profit of 307 M.€ (vs 105 M.€ in 2020); recurring net profit in Portugal of 200 M.€ (vs 84 M.€ in 2020)
o Senior debt rated investment grade with Stable outlook by the three main agencies: Moody's (Baa2); Fitch (BBB+); S&P (BBB).
In the activity in Portugal, BPI's recurring net profit reached 200 M.€, which compares with 84 M.€ in 2020. Net profit as reported in Portugal, which includes nonrecurring expenses with early retirements and voluntary terminations, reached 179 M.€ in 2021 (66 M.€ in the previous year).
The contribution of the holding in BFA to the consolidated net profit was 106 M.€ (which includes 40 M.€ from the 2020 dividend and 50 M.€ from the distribution of reserves taken to the income statement). The contribution of the holding in BCI was 23 M.€ in 2021.
João Pedro Oliveira e Costa, BPI's CEO, stresses: "The 2021 results show that BPI is in a strong position to continue supporting families and businesses on the path to economic recovery. The Bank continues to invest in the quality of services, the expansion of digital banking and the improvement of the Customer experience, which explains the confidence that Customers have in BPI, as shown by the growth in market shares. We are now embarking on a new financial year with the confidence of having a high capitalisation and strong liquidity position, a close-knit team and a strategic vision for growth and sustainability, for which we also have the support of our shareholder CaixaBank".
Total customer resources grew by 9%, reaching €40 305 million at the end of 2021. The market share in customer resources stood at 11.3% in November 2021 (+20 bps yoy). Customer deposits were up by 11%, to 28 872 M.€. Customer deposits, which account for 71% of assets, are the main source of on-balance sheet funding.
Assets under management increased by 12.6%, to 10 861 M.€, with mutual funds showing an expressive growth of 18.2% yoy.
The total customer loans portfolio (gross) expanded by 7.1%, or 1 834 M.€ yoy, to 27 529 M.€. The market share in loans advanced by 40 bps yoy, to 11.1% in November 2021.
The portfolio of corporate loans grew by 4.5%, to 10 523 M.€.
The mortgage loans portfolio increased by 9% yoy, or 1 080 M.€, to 13 089 M.€. Mortgage loans production increased by 40% yoy, reaching 2 443 M.€. BPI's market share in cumulative production up to November was 15.8%, while its market share of mortgage loans in portfolio reached 13.1% in the same month, which represents an increase of 80 bps in the last 12 months.
The portfolio of other loans to individuals rose by 3.8% yoy, to 1 803 M.€. Car and personal loans production, at 656 M.€ in 2021, expanded by 15% yoy.
Gross income registered a significant increase of 7.6% yoy, driven by the strong performance of core income (+7.4% yoy).
Net interest income remained resilient, rising by 1.2% yoy, to 456 M.€, supported by loan volume growth and the contribution of Asset/Liability Management (ALCO).
Net fee and commission income increased by 18% yoy, to €288 million. This growth was underpinned by dynamic sales of mutual funds and capitalisation insurance, as well as the increase in bank fees and commissions on loans and accounts, as well as fees and commissions on insurance intermediation.
The Non-Performing Exposures (NPE, EBA criteria) ratio stood at 1.6% in 2021 (-0.1 p.p. yoy). BPI maintains the best NPE ratio within the Portuguese financial sector, reflecting the high quality of the Bank's assets. NPE coverage by impairments and collaterals stands at 149% (+9 p. yoy).
The Non-Performing Loan ratio (NPL, EBA criteria) decreased by 0.1 p.p., to 2%. NPL coverage by impairment and collateral was 150% at the end of 2021.
Loan impairment net of recoveries decreased from 151 M.€ (including non-allocated impairments set up as a precautionary measure in the context of COVID) in 2020, to 47 M.€ in 2021. The following contributed to the 2021 figure:
The cost of credit risk was 0.17% in 2021 (versus 0.57% 2020).
At the end of 2021, BPI had a cumulative total of 72 M.€ in non-allocated impairments set up in the context of COVID.
BPI met by a significant margin the European Central Bank (ECB)'s minimum requirements for 2021, with the following ratios: CET1 of 14.2%, Tier 1 of 15.7%, and total capital ratio
1 In addition, a gain of 2.3 M.€ (reversals of impairments) was booked in December, therefore the total gain on the sale of loans came up to 25.7 M.€.
of 17.4%. The leverage ratio stands at 6.8%. The MDA Buffer - Capital buffer without limitations on results distribution - was 4.5% at the end of 2021.
BPI meets the MREL requirements2 established for 1 January 2022 by a comfortable margin and is close to meeting the requirements for 1 January 2024:
Recurring operating expenses remained practically unchanged (+0.4%), reflecting: a 2.9% reduction in staff expenses and Other administrative expenses; and a 25.8% increase in depreciation and amortisation, essentially explained by investment in software and works in buildings.
The core efficiency ratio (cost-to-core income) improved to 54.2% in December 2021, which represents a 3.8 p.p. decrease relative to 2020.
At the end of 2021 Banco BPI had a workforce of 4 478 employees (a net reduction of 144 since December 2020). On the same date the Bank's distribution network comprised 349 commercial units, including 297 branches, 19 premier centres, 3 private banking centres, 1 mobile branch, and 29 corporate and institutional centres.
Recurring return on tangible equity (ROTE) from the activity in Portugal stood at 6.8% (vs 2.7% in December 2020).
BPI holds investment grade ratings with Stable outlook by the three main international rating agencies: Moody's (Baa2), Fitch (BBB) and S&P Global Ratings (BBB).
Moody's rated BPI's deposits A3 and Fitch BBB+.
BPI's senior debt is rated Baa2 by Moody's, BBB+ by Fitch and BBB by S&P Global Ratings.
These ratings attest to the Bank's adequate capitalisation, low risk profile, and comfortable liquidity position that shore up its capacity to provide support to the Portuguese economy. Moreover, the Bank counts with the support of its sole shareholder, CaixaBank, the largest financial institution in Spain.
2) MREL requirements as disclosed to the market on 5 Feb. 2021.
3) Including the combined capital buffer requirement (CBR).
80% of the individual digital clients are regular users of the BPI App (mobile). 71% of sales of saving solutions, personal loans and non-financial products are initiated through the digital channels.
At the end of 2021, BPI had a total of 772 thousand digital banking regular users, with increasing adhesion to the mobile channel: 80% of the individual digital clients are regular users of the BPI App (mobile), which posted an increase of 75 thousand active users in 2021.
71% of sales of saving solutions, personal loans and non-financial products were initiated in the net and mobile digital channels (+7 p.p. yoy).
BPI ranks #2 in the digital channels satisfaction index for individual clients and #2 in internet and mobile banking penetration for both individual4 and corporate clients5 .
BPI was considered as the Bank with the best reputation in Portugal, according to the RepScore survey released by OnStrategy, an independent consultant. BPI obtained the highest score of the last five years in the Banking emotional reputation index (64.5/100).
RepScore is developed continuously throughout the year with more than 40,000 citizens online and more than 10,000 in person or by telephone, who classify attributes associated to awareness, admiration, relevance, trust, preference and recommendation.
In 2021, OnStrategy also considered BPI as the brand with the best reputation as an employer in the banking sector in its survey "Employer Brand Reputation".
Social Responsibility has always been a cornerstone of the identity of BPI and the CaixaBank Group, which has been reinforced in Portugal together with the "la Caixa" Foundation, which maintains its commitment to Portugal, with a budget of 30 M.€ in 2021, distributed over four areas: social programmes; culture and science; research and health; education and scholarships.
In March 2021 BPI launched an internal platform that offers volunteering opportunities throughout the country to Employees, retirees and their families, which so far has 2 100 registered members. The platform has permitted to support more than 13,000 people in areas such as financial literacy, entrepreneurship, capacity building of institutions, maths tutoring, support for the elderly, support for the homeless, among others. The Bank also organised its 1st Volunteering Week, consisting of more than 120 initiatives from the north
4BASEF Banks - November 2021 (main banks).
5 Inmark 2021
to the south of the country and the islands, and involving more than 1,300 volunteers, among Employees, their family members and Friends, as well as Clients and Partners.
Among other programmes of support to society, there stand out the following:
At the environmental level, BPI and the CaixaBank Group are seriously committed to sustainable finance, supporting, through their activity, initiatives and projects that contribute to prevent, mitigate and respond to climate change and ease the transition to a low carbon economy. In 2021, BPI and CaixaBank participated as advisors in some of the most important sustainable finance operations in Portugal, with BPI having underwritten/placed more than 300 M.€.
BPI's commitment to the continuous improvement of its environmental performance was rewarded with the certification of the Environmental Management System (EMS) attributed by the international consultancy Bureau Veritas to the banking and support activities at the Casal Ribeiro building in Lisbon. The certification proves the EMS effective implementation and compliance with ISO 14001:2015 International Standard.
BPI intends to extend the EMS and its certification to other facilities as soon as next year and aspires to be a reference in the banking sector in terms of reporting, differentiation of products and services and innovation in environmental and sustainable practices.
BANCO BPI, S.A. Registered office: Avenida da Boavista, 1117, 4100-129 Porto, Portugal Share capital: € 1 293 063 324.98 Registered at Commercial Registry of Porto under registration number PTIRNMJ 501 214 534 and tax identification number 501 214 534
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