Bank Profit Soars Amid Global Headwinds

Banco Comercial Portugues SA (BCP) achieved a notable 12.7% year-on-year increase in net income for the first half of 2026, reaching EUR565.8 million. This performance was largely attributed to substantial growth in net interest income and effective cost control measures.

Key subsidiaries demonstrated significant gains, with Bank Millennium in Poland reporting a nearly 39% rise in net income, benefiting from reduced charges on its Swiss franc mortgage portfolio. Overall customer loans expanded by 8.3% to $65.2 billion, and customer funds grew by 9.8% to $116.7 billion, underscoring the strength of its commercial operations.

The bank made progress in asset quality, decreasing non-performing exposures by EUR187 million and lowering the Non-Performing Exposure (NPE) ratio to 2.2%. The cost of risk remained controlled at 32 basis points. BCP maintained a strong financial footing with a Common Equity Tier 1 ratio of 15.1%, well above regulatory necessities, and committed to a 90% payout policy for dividends and share buybacks.

However, the bank navigated a challenging global economic landscape marked by geopolitical tensions and persistent inflation. The Swiss franc mortgage portfolio in Poland, though reduced, still incurred EUR96.7 million in charges. Profitability in Mozambique was impacted by sovereign risk provisions, keeping its net income near break-even. Increased operating costs, driven by investments in digital transformation, AI, and cybersecurity, were noted, alongside slower-than-guided fee income growth in Portugal.

Looking ahead, BCP upgraded its Net Interest Income (NII) growth guidance for Portugal to 'low-teens' for both 2026 and 2027, supported by strong volume growth and favorable reinvestment rates on maturing hedges.