BPI: Profits in Portugal are rising thanks to rates. Bank strongly recommends limiting the use of new credit measures.

Bank BPI increased profits by 35% in the first nine months of the year to 390 million euros. Of this 390 million, 324 million comes from operations in Portugal - profits in Portugal doubled in these nine months.

The bank has already renegotiated 3,400 mortgage contracts since the introduction of government support measures. But in the week that the new package of measures comes into force, the bank's president warns that only those in genuine need should apply for help because it will lead to "a bill that will have to be paid later".

Overall results rose thanks to a near doubling (+84%) of the financial margin, a measure that mainly reflects the difference between the interest charged by the bank for''loans granted to them and the interest paid to the bank by sources of funding (in particular deposits). The financial margin amounted to 688 million euros.

The bank reported the information to the Securities and Exchange Commission on Monday, and CEO João Pedro Oliveira e Costa presented the results at a press conference in Lisbon.

Customer deposits declined by 6% y-o-y, manifested especially in the first half of the year due to the "leakage" into savings certificates and the use of savings to repay loans, as lending rates rose with EurIBOR. Nevertheless, the bank managed to increase its mortgage loan portfolio by 4% compared to the same period before''about 14.6 billion euros. "The volume of real estate transactions concluded decreased by 15% year-on-year to around €1.8 billion in the first nine months of 2023 due to lower demand in the market," the bank said.

BPI has renegotiated the loans of 3,400 customers. 4,700 get a discount on interest. BPI has revised loans to 3,400 mortgage customers since the first government measures were introduced to mitigate the impact of rising Euribor rates (in November 2022).

Only customers who really need it should join the government measures. This week, new government' will come into force'measures presented by the Ministry of Finance, which include strengthening discounts and stabilizing payments, and the bank says it is ready to accept applications from customers who want to at least simulate their situation and make a decision. "Those who are really struggling should join, not others," says João Pedro Oliveira e Costa. "In practice, this alleviated situation will be paid for later, capitalized by the interest on the loan itself. I think it is important that those who do not have such a dire need do not do so, because the bill will have to be paid later," he adds.

In any case, João Pedro Oliveira e Costa says that "banks should not give advice on this issue because it is a choice that everyone''must do according to its expenditure and income'.

There is a new 'moratorium' on mortgage interest. Find out how it will operate.