Banco Comercial Português (BCP) Q4 2024 earnings summary

Executive summary

• Net income reached EUR 906.4 million in 2024, up 5.9% year-over-year, with Portugal contributing EUR 786.4 million (+8.5%) and Poland EUR 167.1 million, despite significant legal risk charges; Mozambique's net income fell 54% due to sovereign rating downgrades and provisions.

• Customer funds grew 8% to EUR 102.9 billion, with a 4% increase in customer base and mobile customers up 10% year-on-year.

• Solid capital and liquidity: CET1 ratio at 16.3%, total capital ratio at 20.6%, LCR at 342%, NSFR at 181%, and loans-to-deposits at 66%.

• Cost of risk improved to 32 bps from 42 bps, with NPE stock reduced by EUR 127 million and NPE coverage above 100%.

• The bank concluded its previous strategic plan ahead of schedule, achieving investment-grade ratings, an 87% stock appreciation in 2023, and a further 69% rise in 2024.

Financial highlights

• Net interest income was stable at EUR 2,830.9 million (+0.2%), with margin compression in Portugal (NIM down from 2.6% to 2.2%) and margin expansion internationally; commissions rose 4.8% to EUR 808.5 million.

• Operating costs increased 12.4% to EUR 1,307.2 million, mainly due to international activity and wage inflation; cost-to-income in Portugal at 34%.

• Cost of risk improved to 31 bps in Portugal and 33 bps internationally; NPE ratio at 3.2% and hard NPEs at 1.4%.

• Other impairments and provisions fell 21.5% to EUR 675.1 million, mainly from lower legal risk provisions in Poland.

• EPS rose to EUR 0.058 from EUR 0.054 year-over-year.

Outlook and guidance

• Strategic plan targets over EUR 190 billion in business volumes and over 8 million customers by 2028, with CET1 ratio to remain above 13.5% and up to 75% payout policy.

• Loan book growth in Portugal expected at 5% CAGR through 2028, with near-term growth low single-digit and NII broadly flat in 2025.

• Cost-to-income ratio expected below 40% at group level and below 37% in Portugal; cost growth in Portugal in low- to mid-single-digit range.

• Net profit for 2025 expected to be resilient and broadly aligned with 2024, barring major external shocks.

• Supervisory capital requirements lowered for 2025, reflecting improved risk profile.