Sector´s profitability improved despite the worse performance of the recurrent activity

21st July, 2021

In the first three months of the year, loans to non-financial corporations (domestic activity only) maintained the growth trend and rose 1.1% compared to December 2020. On the liability side, deposits increased 2.1% over December, to 285.9 billion euros.

In this quarter, the sector’s net income stood at 424 million euros, despite the worse performance in the recurrent activity, with the net interest income decreasing 3.5% and fees dropping 2.2%, both in year-on-year terms.

The improvement in profitability is mostly explained by the lower level of impairments and the increase in the net result of financial operations. Nonetheless, the Portuguese banking sector’s profitability continues below the cost of capital and remains one of the biggest challenges the sector is facing.