Banco Portugues Do Atlantico Net Income Up 24.8% to EUR 138.0 Million PTE 27.660 Billion in 1999.
Business Editors
LISBON--(BUSINESS WIRE)--Jan. 18, 2000--Banco Portugues do
Atlantico today reported net income for 1999 of EUR 138.0 million (PTE
27.660 billion), an increase of 24.8% over net income of EUR 110.6
million in 1998. The strong growth in net income led to EPS growth of
11.4% - from EUR 0.20 to EUR 0.22 (PTE 43.9) - reflecting the dilutive
impact of the share capital increase of October 1998. ROE rose from
14.2% in 1998 to 15.3% in 1999, while ROA stood at 0.7% (0.6% in
1998).
"A dynamic approach towards seizing business opportunities and a
rigorous approach towards risk evaluation and protecting financial
margins were Atlantico's main commercial objectives of 1999. The
strong growth of loans and advances to individuals and non-financial
corporates, the preservation of loan portfolio quality, and the very
comfortable levels of risk provision, all supported the conciliation
of the further increase of turnover with a strenghtened asset
structure", commented Mr. Jardim Goncalves, Banco Portugues do
Atlantico's Chairman and CEO, adding that "the criterious expansion of
the distribution network and a continuing focus on measures aimed at
the rationalisation and stabilisation of the commercial areas support
platform (completed in 1999 with the integration of middle-offices and
with the centralisation of activities such as risk evaluation,
decision-making, monitoring and loan recovery) contributed equally to
the good performance, efficiency and improvement in profitability of
Atlantico in 1999".
-0-
PROFITABILITY INDICATORS 1999 1999 1998 Change
PTE EUR EUR (99/98)
Net income
(EUR million and PTE billion) 27.660 138.0 110.6 24.8%
Earnings per Share 43.9 0.22 (a)0.20 11.4 %
ROE 15.3% 14.2%
ROA 0.7% 0.6%
(a) Adjusted for the re-nomination and stock split which took place in
1999.
The following factors contributed to the increase in Banco
Portugues do Atlantico's Net Income: sustainability of net interest
income, benefiting mainly from the strong increase of loans and
advances to customers; the appropriation of results of associated
companies consolidated by the equity accounting method, which
generally performed well in 1999; an increase in commissions,
reflecting growth in cross-selling of specialised financial products
and services; an improvement in gains from trading securities,
benefiting from the performance of the financial markets in the last
quarter of 1999 and from hedging interest rate mismatch arising from
retail activities. The increase in Total Income more than offset the
growth of credit risk provisions (exceptionally influenced by the
re-negotiation of a loan, which implied an increase in specific
provisions set aside, notwithstanding the impact derived from the very
strong growth of loans in reinforcing generic provisions), and the
increase of operating costs, resulting from the expansion of the
Atlantico and Expresso Atlantico networks and increased turnover and
transaction levels.
The increase in Loans and Advances to customers of 29.8% to EUR
5,910 million (PTE 1,185 billion) as at December 31, 1999, reflects
Atlantico's dynamic commercial approach and benefited from a
favourable economic environment, without sacrificing Atlantico's
rigorous risk appraisal procedures or the protection of the net
interest margin.
VOLUME INDICATORS Dec. 31, 99 Dec. 31, 99 Dec. 31, 98 Change
PTE EUR EUR (99/98)
Total Assets 4,305 21,472 19,628 9.4%
Total Customers'
Funds (1) 2,777 13,853 12,860 7.7%
Loans and Advances to
customers 1,185 5,910 4,554 29.8%
(1) Demand and time deposits, certificates of deposit, unit trusts,
assets under management and capitalisation insurance products
(EUR million and PTE billion)
Total Customers' Funds (including customers' deposits,
certificates of deposit, assets under management and capitalisation
insurance) were up 7.7%, to EUR 13,853 million (PTE 2,777 billion) as
at December 31, 1999. This performance was achieved despite a lower
household savings rate and the reduced attractiveness of financial
products, substitutes to bank deposits, in the face of the weak
performance of the Portuguese stock market up until September 1999. Of
note, however, is the strong increase in Total Customers' Funds in the
fourth quarter, in part supported by the revival of the stock market
and by the diversion of savings towards instruments with fiscal
benefits. Total assets stood at EUR 21,472 million (PTE 4,305
billion), which represents an increase of 9.4%, between December 31,
1998 and 1999, thus recovering from the sharp fall which occurred in
the first quarter, explained by the reduction of interbank market
activity, as a consequence of the loss of Atlantico's market-maker
status in the monetary market and of the placement of bonds in the
international markets by other entities of the BCPAtlantico Group.
OPERATING INDICATORS 1999 1998
Net Interest Margin 1.4% 1.4%
Other Income (net) /
Net Interest Margin and Other Income 55.6% 49.1%
Operating Costs /
Net Interest Margin and Other Income (net) 61.7% 67.8%
The net interest margin stood at 1.4% in 1999, benefiting from
the lower volume of operations in the interbank markets and from the
expansion of the loan portfolio, which offset the impact of shrinking
spreads induced by fiercer competition in the individuals and small-
and medium-sized companies markets, the increased cost of funding in
the monetary markets and the deterioration of spreads on demand
deposits.
The proportion of Other Income to Total Income stood at 55.6% in
1999 (49.1% in 1998) as a result of an increase in commissions from
services, and of its increased relative weight in the income
structure. Income from securities grew favourably, reaching EUR 61.2
million in 1999, reflecting the improvement in the profitability of
the associated companies. Net commissions increased from EUR 85.9
million to EUR 100.8 million, as a result of the intensification of
cross-selling products and services, deeper penetration and higher
transaction volumes in the cards business and transfers, and an
increase in commissions on securities operations in the fourth
quarter, reflecting a larger number of operations in the capital
market in that period. Net gains from trading securities evolved
favourably increasing to EUR 79.9 million, given the impact of the
evaluation of interest risk covering positions associated with both
the commercial activity and the securities portfolio, and despite
these being partially mitigated by the fall of net interest income.
Operating costs were up 8.2% in 1999 reaching EUR 333.7 million,
allowing an improvement in the efficiency ratio - which decreased from
67.8% in 1998 to 61.7% in 1999 - showing, on one hand, the effects of
the operational rationalisation and scale economies associated with
increased turnover and, on the other hand, the faster pace of revenue
growth compared to operating costs. The increase in operating costs is
attributable to the increase of staff costs by 11.7%, which reflects
both the effect of recruitment of employees during the year, along
with the expansion of distribution networks, and increased
contributions to the Pension Fund and indemnities paid following the
end of Banco Portugues do Atlantico's activity in France, and
increased services and supplies from third parties (+6.3%), below the
increase in turnover volumes and so reflecting efficiency and
productivity gains.
LOAN QUALITY INDICATORS 1999 1998
Loans more than 90 days overdue/Total Loans 1.1% 1.9%
Total past due Loans/Total Loans 1.3% 2.0%
Provisions /Loans more than 90 days overdue 213.9% 186.9%
Provisions/Total past due Loans 186.5% 178.5%
Credit quality indicators continued to show a substantial
improvement. Past due loans decreased 18.5%, from EUR 91.7 million at
the end of 1998 to EUR 74.8 million in 1999, with the proportion of
loans more than 90 days overdue over total loans decreasing to 1.1%
from 1.9% in 1998. The provision coverage ratio of loans more than 90
days overdue stood at very comfortable levels, up to 213.9% at
December 31, 1999, from 186.9% at the end of 1998.
Banco Portugues do Atlantico's share price followed the different
phases that characterised the evolution of the Portuguese stock market
in 1999 while showing, however, a globally superior performance to
both the market average and to the financial sector with the stock
appreciating 16.6% (against the 8.7% increase of the PSI-20 index) in
1999. The listing, on September 22, of the shares resulting from the
share capital re-denomination was a pioneering initiative in the
Portuguese market that was a considerable success and gave rise to
greater investor interest in Atlantico's shares. Banco Portugues do
Atlantico's shares closed the year at EUR 4.07, appreciating 44.3%
between September 21 and December 31, 1999 (in the same period the
PSI-20 appreciated 22.3%), with an average daily transaction volume of
1.5 million shares, whilst before the stock-split the same average
stood at 111,000 shares. In 1999, 202.1 million Banco Portugues do
Atlantico shares changed hands (adjusted for the stock
re-denomination) on the Lisbon Stock Market, representing a turnover
of EUR 687.2 million. Banco Portugues do Atlantico was ranked the
ninth company in terms of capitalisation on the Portuguese stock
market, with a value of EUR 2,566.1 million as at December 31, 1999.
STOCK MARKET INDICATORS (a) 1999 1999 1998
PTE EUR EUR
Market Capitalisation 514.4 2,566.1 2,200.8
Market price per share (EUR/PTE)
Maximum 822 4.10 4.63
Minimum 561 2.80 2.80
Close 816 4.07 2.49
Transactions on the Lisbon Stock
Market
Number of share transactions
(millions) 202.1 288,3
Value of Transactions 137.8 687.2 1,264.9
(a) Indicators refer to 1998 and to the period between January 1 and
September 21, 1999, adjusted for the effect of the stock-split.
"Banco Portugues do Atlantico's 1999 results confirmed the
expectations about our new commercial and transactional platforms, the
strengthening of our relationship with our traditional client base and
the acquisition of new clients in attractive segments, all of which
allow us to foresee continuing rapid organic growth ahead", said Mr.
Jardim Goncalves, concluding that: "Within the process of integration
of Banco Mello and of Companhia de Seguros Imperio in the BCPAtlantico
Group, we will benefit directly and indirectly from the already
announced restructuring programmes. These benefits will tend to
increase the cost savings associated with the integration in
ServiBanca of operative units and common infra-structures, as well as
increasing returns through the enlargement of a unified treasury and
activities of the associated specialised companies; moreover,
Atlantico, will benefit from the absorption of some branches of the
Mello network in places where we are not yet present but would be
willing to enter."
BANCO PORTUGUES DO ATLANTICO
CONSOLIDATED STATEMENT OF INCOME
(Amounts expressed in million)
-----------------------------------
Accumulated
-----------------------------------
EUR PTE
-----------------------------------
31/12/99 VAR. 31/12/99 31/12/98
-----------------------------------
Interest income 848.7 -14.8% 170,148 199,637
Interest expense 608.5 -20.4% 121,991 153,184
Net interest income 240.2 3.7% 48,157 46,453
Provision for possible loan losses 67.1 80.9% 13,460 7,442
Net interest income after
provision for possible
loan losses 173.1 -11.1% 34,697 39,011
Other operating income:
Income from securities 61.2 53.1% 12,275 8,017
Commissions 108.6 15.7% 21,779 18,821
Profit arising from
trading activity 159.8 -35.1% 32,044 49,371
Other income 72.6 19.4% 14,564 12,194
Gains on sale of shares of
subsidiaries 0.0 0 0
402.3 -8.8% 80,662 88,403
Other operating expenses
Commissions 7.8 -1.5% 1,569 1,593
Losses arising from
trading activity 79.9 -58.1% 16,025 38,236
Staff costs 149.9 11.7% 30,055 26,903
Other administrative costs 149.0 6.3% 29,868 28,106
Depreciation 34.8 2.6% 6,982 6,804
Other provisions 2.7 535 60
Other expenses 13.7 -28.0% 2,741 3,809
437.8 -16.8% 87,775 105,511
Income before income taxes 137.6 25.9% 27,584 21,903
Income taxes 4.2 16.5% 846 726
Net income 133.4 26.3% 26,738 21,177
Minority interests (4.6) -922 -989
Net income attributable
to the Bank 138.0 24.8% 27,660 22,166
----------------------------------------------------------------------
Number of shares (Average) 630,500 12.0% 630,500 562,792
Earnings per share in Escudos 0.22 11.4% 43.9 39.4
--------------------------------------------
Quarterly
--------------------------------------------
PTE
--------------------------------------------
31/12/99 30/09/99 30/06/99 31/03/99 31/12/98
--------------------------------------------
Interest income 48,158 36,600 39,063 46,327 48,449
Interest expense 36,457 24,663 26,871 34,000 35,934
Net interest income 11,701 11,937 12,192 12,327 12,515
Provision for possible
loan loss 5,936 2,245 3,003 2,276 2,228
Net interest income after
provision for possible
loan losses 5,765 9,692 9,189 10,051 10,287
Other operating income:
Income from securities 3,653 2,406 3,327 2,889 1,815
Commissions 6,228 5,251 5,290 5,010 5,577
Profit arising from
trading activity 8,366 5,511 6,925 11,242 11,544
Other income 4,017 3,990 3,597 2,960 2,636
Gains on sale of shares
of subsidiaries 0 0 0 0 0
22,264 17,158 19,139 22,101 21,572
Other operating expenses
Commissions 435 350 325 459 267
Losses arising from
trading activity 2,268 1,960 3,318 8,479 8,083
Staff costs 8,091 7,757 7,312 6,895 6,875
Other administrative
costs 7,419 7,423 7,685 7,341 7,193
Depreciation 1,918 1,640 1,677 1,747 1,852
Other provisions -296 259 593 -21 264
Other expenses 600 559 705 877 887
20,435 19,948 21,615 25,777 25,421
Income before income taxes 7,594 6,902 6,713 6,375 6,438
Income taxes 478 317 -1 52 -185
Net income 7,116 6,585 6,714 6,323 6,623
Minority interests -152 -187 -256 -327 -376
Net income attributable
to the Bank 7,268 6,772 6,970 6,650 6,999
----------------------------------------------------------------------
Number of shares (Average) 630,500 630,500 630,500 630,500 600,750
Earnings per share in Escudos 11.5 10.7 11.1 10.5 11.7
---------------------------------------
Quarterly
---------------------------------------
PTE
---------------------------------------
30/09/98 30/06/98 31/03/98 31/12/97
---------------------------------------
Interest income 50,799 43,314 57,075 50,654
Interest expense 38,095 32,353 46,802 38,938
Net interest income 12,704 10,961 10,273 11,716
Provision for possible
loan loss 1,568 1,723 1,923 3,808
Net interest income after
provision for possible
loan losses 11,136 9,238 8,350 7,908
Other operating income:
Income from securities 1,967 2,398 1,837 1,631
Commissions 5,056 3,178 5,010 5,541
Profit arising from
trading activity 16,565 7,021 14,241 31,452
Other income 2,636 2,867 4,055 3,878
Gains on sale of shares
of subsidiaries 0 0 0 -1,889
26,224 15,464 25,143 40,613
Other operating expenses
Commissions 458 291 577 799
Losses arising from
trading activity 13,776 4,762 11,615 28,927
Staff costs 6,983 6,540 6,505 8,533
Other administrative
costs 8,115 5,652 7,146 5,198
Depreciation 1,705 1,744 1,503 1,581
Other provisions 220 -597 173 -2,665
Other expenses 503 1,561 858 351
31,760 19,953 28,377 42,724
Income before income taxes 5,600 4,749 5,116 5,797
Income taxes 485 28 398 225
Net income 5,115 4,721 4,718 5,572
Minority interests -268 -467 122 155
Net income attributable
to the Bank 5,383 5,188 4,596 5,417
----------------------------------------------------------------------
Number of shares (Average) 550,000 550,000 550,000 550,000
Earnings per share in Escudos 9.8 9.4 8.4 9.8
BANCO PORTUGUES DO ATLANTICO
Consolidated Balance Sheet as at 30 December, 1999 and 1998
1999 1999 1998
---------- ----------- ------------
Assets (Thousands of Euros) (Thousands of Escudos)
Cash and deposits at
central banks 441,664 88,545,655 38,166,624
Loans and advances to credit
institutions
Repayable on demand 547,830 109,830,148 37,633,799
Other loans and advances 9,203,727 1,845,181,587 1,965,806,492
Loans and advances to
customers 5,910,079 1,184,864,461 912,994,561
Securities 3,876,816 777,231,839 653,178,532
Investments 252,375 50,596,711 41,603,306
Intangible assets 58,499 11,727,899 10,972,516
Tangible assets 214,915 43,086,632 47,904,455
Other debtors 288,114 57,761,730 94,547,248
Prepayments and accrued
income 677,707 135,868,068 132,210,121
---------- ------------ ------------
21,471,726 4,304,694,730 3,935,017,654
=========== ============= =============
Liabilities
Amounts owed to credit
institutions
Repayable on demand 142,119 28,492,340 125,747,264
With agreed maturity
date 11,673,332 2,340,293,028 1,948,461,092
Amounts owed to customers
Repayable on demand 2,613,824 524,024,710 422,399,003
With agreed maturity date 4,524,812 907,143,265 980,009,142
Debt securities 311,176 62,385,178 5,228,500
Other liabilities 63,133 12,657,064 24,999,352
Accruals and deferred income 516,979 103,644,930 128,458,204
Provision for liabilities
and charges 126,335 25,327,829 25,274,008
Subordinated debt 521,146 104,480,462 104,497,324
---------- ----------- ------------
Total Liabilities 20,492,856 4,108,448,806 3,765,073,889
---------- ------------- -------------
Shareholders' Equity
Share capital 630,500 126,403,901 126,100,000
Share premium 142,536 28,575,972 28,911,775
Reserves and retained
earnings 195,219 39,137,882 13,886,201
---------- ------------ ------------
Total Shareholders' Equity 968,255 194,117,755 168,897,976
--------- ------------- ------------
Minority interests 10,615 2,128,169 1,045,789
---------- ------------- ------------
21,471,726 4,304,694,730 3,935,017,654
=========== ============= =============
Official exchange of Euro as at 31 December 1999: 200.482
BANCO PORTUGUES DO ATLANTICO
Consolidated Statement of Income
for the years ended 31 December, 1999 and 1998
1999 1999 1998
--------------- --------- ------------
(Thousands of Euros) (Thousands of Escudos)
Interest income 848,696 170,148,188 199,637,064
Interest expense 608,488 121,990,879 153,183,721
--------- ------------ -----------
Net interest income 240,208 48,157,309 46,453,343
Provision for loan losses 67,137 13,459,706 7,442,586
--------- ------------ -----------
Net interest income after
provision for loan losses 173,071 34,697,603 39,010,757
---------- ------------ -----------
Other operating income:
Income from securities 61,228 12,275,111 8,017,220
Commissions 108,631 21,778,513 18,821,155
Profit arising from
trading activity 159,835 32,044,052 49,371,313
Other income 72,644 14,563,870 12,193,632
---------- ----------- -----------
402,338 80,661,546 88,403,320
---------- ------------ -----------
Other operating expenses:
Commissions 7,826 1,569,069 1,592,745
Losses arising from
trading activity 79,934 16,025,271 38,235,654
Staff costs 149,915 30,055,262 26,903,499
Other administrative costs 148,982 29,868,176 28,105,840
Depreciation 34,827 6,982,226 6,804,416
Other provisions 2,667 534,785 59,643
Other expenses 13,675 2,741,457 3,808,864
-------- ----------- -----------
437,826 87,776,246 105,510,661
-------- ------------ ------------
Income before income
taxes 137,583 27,582,903 21,903,416
Income taxes 4,219 845,801 726,382
-------- ------------ ------------
Net income 133,364 26,737,102 21,177,034
Minority interests (4,601) (922,439) (988,855)
---------- ---------- -----------
Net income for the year
attributable to the
Bank 137,965 27,659,541 22,165,889
=========== =========== ==========
Official exchange of Euro as at 31 December 1999: 200.482
*T
--30--ah/ny* mjr/ny sdg/ny
CONTACT: Banco Portugues do Atlantico
Miguel Namorado Rosa
Tel: +351 1 422 43 60
or
Citigate Dewe Rogerson:
Kevin Soady/Toby Moore/
Emma Pickford
Tel: +44 171 638 95 71
or
Citigate Dewe Rogerson:
Cindy Lyman/
Kerry Schneider
Tel: +1 212 688 6840
KEYWORD: INTERNATIONAL EUROPE
INDUSTRY KEYWORD: BANKING EARNINGS
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