SOLID CAPITAL POSITION
Millennium bcp is focused on continuing to grow its customer base and business acquisition on a sustainable basis.
BIOGRAPHY
Nuno Amado studied business administration at ISCTE Business School and completed an Advanced Management Program at INSEAD in Fontainebleau. In 1985, he joined the audit and consulting department at KPMG, and five years later began a banking career that continues today, working at Citibank Portugal, Banco Fonsecas & Burnay, and Deutsche Bank Portugal. In 1997, he joined Banco Santander Totta and became the Group CEO for Portugal in 2006. In 2012, he became CEO of Millennium bcp and was named chairman of the bank’s Board of Directors in 2018.Would you give us an overview of the evolution and main milestones for Millennium bcp?
Millennium bcp is the only private-sector bank listed on the Portuguese Stock Exchange. This clearly marks us apart from other Portuguese banks. We currently have a well-balanced balance sheet in terms of funding and lending; we went from having a loan-to-deposit ratio of 164% to having more deposits than loans today. Second, we currently have a much stronger capital base of 12% up from 4%, and want to continue to grow this ratio to obtain a larger capital base. Our non-performing loan (NPL) figure was previously close to EUR13 billion; it has since fallen to around EUR6 billion and falls by EUR1-1.5 billion every year. Moreover, we have increasing volumes of new loans and businesses. There were several years when we did not grow our customer base in Portugal, although we managed to increase it in Poland and Africa. In 2018, for the first time in a long time, we had a net gain in customers and new opportunities. Our main challenge is to continue to grow our customer and business acquisition on a sustainable basis. We also want to work on the profitability of Millennium bcp, because we have an excellent cost-to-income ratio of 46-47%. However, we have to maintain and improve it in the future to ensure our capacity to generate capital, reduce NPLs, acquire more business and customers, and invest more rapidly in the digitization processes. We need greater digitization both for our processes and to change the way we connect with our customers.
What is your strategy to keep growing and strengthen your position in dynamic markets like Mozambique and Poland?
Our approach is to focus on our key, core markets, which are basically Portugal, Mozambique, and Poland, as well as Angola through a partnership. Our objective is to maintain a solid capital position in all these core markets, along with a quality balance sheet, while growing our customer base. This is a common strategy for all the key markets we are present in, though some adjustments are necessary in each market because not every country is in the same position in their financial cycle. In the Portuguese market, we have a critical mass as the largest private sector bank in the country in terms of business volumes. In Poland, we have around 5%—and growing—market share in what is considered a large market. In Mozambique, we are the key foreign bank in the sector, and in Angola, we are one of the top three private-sector banks with our partner there. We did a merger two years ago and are now better prepared for the future than before. We are extremely comfortable in the markets we are in.
In 1H2018, Millennium bcp reached a net profit of EUR150 million, a 67% increase YoY. What are the reasons for this?
The measurement we use is cost-to-income, which refers to our operating profit for our business size and cost base. A cost-to-income ratio of about 46-47% means one has an excellent operating profit ratio. In the past, a high level of impairments affected this figure, and we still have a high level in 2018; however, the level is lower than before, and our profits have increased. The main tools to maintain and develop our profitability are an excellent cost-to-income ratio and a solid operating profit base, coupled with normalizing our impairment level over the coming years. We are doing this very consistently, with decreases in our NPL book. We have also seen our business and customer volumes increasing since 2017. In 2018, we gained in net terms more than 300,000 customers, more than 100,000 of which were in Portugal. On the other hand, we also expect to see a normalization of interest rates. Together, these factors give a reasonably good perspective for 2018 and 2019.
SOLID CAPITAL POSITION
TABLE OF CONTENTS
Focus: Community of Portuguese Language Speaking Countries
Making an Impact
Established in 1996, the Community of Portuguese Language Speaking Countries (CPLP) is a mechanism geared at linking and sharing the experience of Lusophone countries. Besides Portugal, this includes Brazil, Portugal, Cape Verde, Angola, Mozambique, Guinea-Bissau, and São Tomé and Príncipe.
read articleFocus
Don’t Mind the Disruption
Having won the 2017 Eurovision Song Contest, Lisbon hosted the 2018 event. The relevance? Well, the contest began back in 1956 as a showcase not only of song, but of then-nascent live television broadcast technology. Today, Portugal is on the cutting edge of new technological developments.
read articleInterview
João Pedro Soeiro de Matos Fernandes , Minister , Environment and Energy Transition
The Ministry for the Environment and Energy Transition is focusing on decarbonizing the economy, valuing the territory and its habitats, and striving for a more circular use of the country's resources.
read articleInterview
António Braz Costa , General Manager, Portuguese Technological Centre for the Textile & Clothing Industries (CITEVE)
CITEVE has transformed the industry by promoting value addition, adopting the latest technologies, and ensuring the highest standards of environmental sustainability.
read articleFocus: New airport
Right Time to Seize Missed Opportunities
Portugal has seen its air traffic figures increase by as much as 80% in the last five years. As a result, its transportation infrastructure, and Lisbon's airport in particular, cannot cope with the rising numbers. A new airport project that will turn a military base into a commercial airport is now under discussion to bring much-needed relief to air traffic.
read articleInterview
Germano de Sousa , President, Grupo Germano de Sousa
Grupo Germano de Sousa's success can best be summed up by its understanding that science and medicine only really progress when technological development is combined with a deeper respect for human values and professional ethics.
read articleInterview
Isabel Capeloa Gil , Rector, Universidade Católica
Having pioneered the introduction of multiple subject areas to Portugal's tertiary education scene, Universidade Católica is aspiring to establish the country's first private medical school and introduce cutting-edge digital transformation.
read articleInterview
Carlos Guillén Gestoso , President, Escola Universitária de Ciências Empresariais, Saúde, Tecnologias e Engenharia & President, Atlantica University
Atlantica University differentiates through its company-university model and an MBA program in partnership with the University of California, Berkley, among other initiatives, to produce practical theoreticians.
read articleFocus: Public teaching staff
An Age-old Problem
Over a decade of austerity measures combined with an ageing population have seen the average age of the Portuguese public teaching staff progressively climb to one of the highest in the OECD. With frozen salaries, an extended retirement age, and precarious working conditions, today the sector faces one of its biggest challenge yet.
read articleInterview
Pedro Queiroz , General Manager, Federation of the Portuguese Agri-Food Industry (FIPA)
Portugal's economic recovery has seen its F&B sector emerge with annual turnovers of EUR16 billion, thanks to FIPA's undeterred focus on stable policies, excellent nutrition standards, and sustainability.
read article
