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By Sergio Goncalves
LISBON, July 28 (Reuters) – Portugal’s largest personal bank, Millennium bcp, reported a 55.3% drop in net profit in the first half to 76 million euros ($89 million) on Tuesday, after costly provisions to offset the economic impact had an effect on the coronavirus outbreak.
Portugal is entering its worst recession in a century due to the pandemic, and the country’s central bank forecasts that the economy will shrink 9.5% this year, worse than the government’s estimate of a 6.5% drop.
“The effects were strongly influenced through this total coronavirus scenario with a significant buildup of deficiencies in the first part of the year, already reflecting the unfavorable progression of the economy due to the pandemic,” the bank’s executive leader Miguel Maya said at a press conference.
The bank’s provisions and impairments increased by 44.5% to about 351 million euros in the first six months of 2020 last year, he said in a statement.
Millennium BCP said it has already approved about 123,000 moratoriums on bank lending to families and businesses affected by the pandemic.
In June, the Portuguese government prolonged the suspension of loan repayments for six months until March until an expected accumulation of bad debts due to the crisis.
Although the accumulation of provisions and impairments affects its profitability, the bank reported that its source of net interest income increased by 2.7% to about EUR 759 million in the first part of 2020.
Millennium operates in Poland, Angola and Mozambique.
Polish bank Millennium, which is in half through Millennium bcp, announced last week that its first-half profit fell 79% to 16.2 million euros.
Millennium bcp’s largest shareholder is Fosun, a Hong Kong-based investment holding company, followed by Angolan state oil company Sonangol. ($1 – 0.8526 euros) (Reporting through Sergio Goncalves and Maria Goncalves, Edition through Catarina Demony, Kevin Liffey and Emelia Sithole-Matarise)
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