PORTUGAL - Finance
Chairman, Millennium BCP
Nuno Amado studied business administration at ISCTE Business School and completed an Advanced Management Program at INSEAD in Fontainebleau. In 1985, he joined the audit and consulting department at KPMG, and five years later began a banking career that continues today, working at Citibank Portugal, Banco Fonsecas & Burnay, and Deutsche Bank Portugal. In 1997, he joined Banco Santander Totta and became the Group CEO for Portugal in 2006. In 2012, he became CEO of Millennium bcp and was named chairman of the bank’s Board of Directors in 2018.
Millennium bcp is the only private-sector bank listed on the Portuguese Stock Exchange. This clearly marks us apart from other Portuguese banks. We currently have a well-balanced balance sheet in terms of funding and lending; we went from having a loan-to-deposit ratio of 164% to having more deposits than loans today. Second, we currently have a much stronger capital base of 12% up from 4%, and want to continue to grow this ratio to obtain a larger capital base. Our non-performing loan (NPL) figure was previously close to EUR13 billion; it has since fallen to around EUR6 billion and falls by EUR1-1.5 billion every year. Moreover, we have increasing volumes of new loans and businesses. There were several years when we did not grow our customer base in Portugal, although we managed to increase it in Poland and Africa. In 2018, for the first time in a long time, we had a net gain in customers and new opportunities. Our main challenge is to continue to grow our customer and business acquisition on a sustainable basis. We also want to work on the profitability of Millennium bcp, because we have an excellent cost-to-income ratio of 46-47%. However, we have to maintain and improve it in the future to ensure our capacity to generate capital, reduce NPLs, acquire more business and customers, and invest more rapidly in the digitization processes. We need greater digitization both for our processes and to change the way we connect with our customers.
Our approach is to focus on our key, core markets, which are basically Portugal, Mozambique, and Poland, as well as Angola through a partnership. Our objective is to maintain a solid capital position in all these core markets, along with a quality balance sheet, while growing our customer base. This is a common strategy for all the key markets we are present in, though some adjustments are necessary in each market because not every country is in the same position in their financial cycle. In the Portuguese market, we have a critical mass as the largest private sector bank in the country in terms of business volumes. In Poland, we have around 5%—and growing—market share in what is considered a large market. In Mozambique, we are the key foreign bank in the sector, and in Angola, we are one of the top three private-sector banks with our partner there. We did a merger two years ago and are now better prepared for the future than before. We are extremely comfortable in the markets we are in.
The measurement we use is cost-to-income, which refers to our operating profit for our business size and cost base. A cost-to-income ratio of about 46-47% means one has an excellent operating profit ratio. In the past, a high level of impairments affected this figure, and we still have a high level in 2018; however, the level is lower than before, and our profits have increased. The main tools to maintain and develop our profitability are an excellent cost-to-income ratio and a solid operating profit base, coupled with normalizing our impairment level over the coming years. We are doing this very consistently, with decreases in our NPL book. We have also seen our business and customer volumes increasing since 2017. In 2018, we gained in net terms more than 300,000 customers, more than 100,000 of which were in Portugal. On the other hand, we also expect to see a normalization of interest rates. Together, these factors give a reasonably good perspective for 2018 and 2019.
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