Caixa Geral de Depósitos (CGD) H2 2023 earnings summary

Executive summary

• 2023 net income reached €1,291M, up 53.2% from €843M; domestic activity contributed €1,085M and international activity a record €206M.

• Results were supported by net interest income growth, improved asset quality and cost control; capital ratios remained above 20% after distributions.

• Portuguese deposit and credit leadership continued, alongside digital growth and a consolidated NPL ratio of 1.6%.

Financial highlights

• Net interest income rose 103.5% to €2,866M; total operating income increased 55.6% to €3,603M.

• Net fees and commissions fell 6.9% to €565M; operating costs declined 15.1% to €1,021M, partly reflecting €246M in 2022 pension-liability transfer costs.

• Net operating income before impairments rose 132.2% to €2,582M; net operating income reached €1,933M, up 71.0%.

• Net income rose 53.2% to €1,291M; income tax increased to €623M from €271M in 2022.

• Recurrent operating costs increased 2.8% YoY, reflecting inflation; 2023 also included €80M from former Pension Fund asset sales and €82M added value from the headquarters building.

Outlook and guidance

• Maximum distributable amount for 2024 was €525M, above the €461M budgeted amount; 2023 dividends paid and the 2024 planned dividend exceed €1.2B combined.

• Short-term interest rates were expected to start declining in the next quarter; euro-area inflation projections were 2.7% in 2024, 2.1% in 2025 and 1.9% in 2026.