The fourth-biggest bank in Portugal, which has been fully owned by Spain’s CaixaBank since the end of 2018, saw an exceptional performance in 2023. After record results for the firm across the board, Banco BPI is clear winner of the award for Portugal’s best bank.
AfE 2024
Net profit from the Portuguese business rose 86% to a record €444 million. Overall net interest margin for the Portuguese banking sector hit 4.4% in 2023, compared with an average of 2% in the period from the global financial crisis to 2022. BPI’s margin stood at 3.75%.
But the boost to profits handed to banks around the world by the post-pandemic rise in interest rates is only part of the story at BPI. The bank has focused relentlessly on efficiency and building up its digital credentials – as well as simply pushing harder for business.
The bank introduced a new kind of branch during 2023, which it calls the All in One. It is in Lisbon and is a state-of-the-art space where clients can use all manner of physical and digital banking services. Among the bank’s other digital developments is a system that allows clients to handle the deeds for housing loans remotely, with digital deeds authenticated with digital solutions and mobile keys.
The bank’s loan book rose 3% to €30 billion, with the increase widely dispersed across sectors. The bank claimed a share of 12.4% of Portuguese corporate loans, its highest level ever, while a 14.4% share of mortgages was another record.
Customer loans rose 1%. Non-performing loans fell and the NPL ratio dropped 10 basis points to 1.87%. The bank posted a big increase in return on equity, rising from 10.1% to 14.6%, with recurrent return on tangible equity in Portugal hitting 16%. Fitch and Moody’s both upgraded the bank’s ratings during 2023.
The bank is continuing to build its already dominant 24% market share in Portuguese private banking and onboarded 900 affluent clients in 2023. To service its growing business, it has now launched BPI Wealth, an advisory practice for the bank’s high net-worth clients.
Writing in the bank’s annual report for 2023, BPI chief executive João Pedro Oliveira e Costa acknowledged the effect of monetary policy on the bank’s results but argued that BPI’s commitment to lending, its willingness to renegotiate mortgage loans for struggling customers, its conversative approach to credit risk and its strategic commitments to digitization and sustainability had all played their part in what had been the firm’s “best financial year ever”.