Credit Momentum is Strong at Novobanco, But Taxes and Sales Costs Slashed Profit

They are the hateful bank where I had to work for a d7 visa in Portugal. The bank announced its balance sheet for the first half of this year and the figures give us a very clear picture: Although things are going smoothly in the field and on the commercial side, the cost and tax aspects of the business have seriously reduced the net profit. Novobanco closed the first half of the year with a net profit of 367.2 million euros, a decrease of 15.6% compared to the same period of the previous year. So what exactly lies behind this decline when credit growth is so strong? Let's take a look at the kitchen of numbers together. Costs and Taxes Made the Table Heavy When we look at the table, we see that almost 80% of the 67.6 million euro decrease in profit goes to a single address: rising taxes and operational expenses. Tax Burden Is Increasing: The bank's tax expenses increased by a significant 38% compared to last year, rising from 62 million euros to 85 million euros. Operational Kitchen: There is also an increase of approximately 31 million euros (11.8%) on the operating expenses side. One-off expenses related to the sales process to Groupe BPCE play a big part in this. However, even if we remove these one-time expenses from the equation, expenses have grown by 7.1%. Income-Expenditure Balance: This increase in expenses; It has outpaced both commercial banking revenues, which increased by 0.5%, and total banking revenues, which decreased by 5%. Other Items: Added to the fact that other operating income fell from 57.5 million euros to 14.6 million euros, the bottom line of the balance sheet remained under pressure. What is the Momentum and Credit Growth in the Field? When we look at the other side of the coin, there is a bank that is operationally sound. Commenting on the results, CEO Mark Bourke draws attention to exactly this point, that is, "strong commercial momentum and execution capacity". The numbers confirm this: Customer Loans: While customer loans have grown by approximately 6% since the beginning of the year, the increase in gross loan volume exceeded 7%. Market Share: The bank's overall market share climbed to 9.4%. Interest Income and Provisions: Net interest income remained stable at 563.3 million euros, with a small increase of 0.8%. The decrease in provisions and impairments by 25.3 million euros was a positive detail that gave breathing room to the balance sheet. In short, Novobanco continues to expand its customer network and increase its loan volume in the field. However, the burdens brought by the BPCE sales process and increasing tax items seem to have overshadowed the financial results in the first half. Source: ECO News (Eco.pt)