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Millennium bcp's 2023 profit hits record, dividends to resume

By Sergio Goncalves

LISBON (Reuters) - Portugal's largest listed bank, Millennium bcp, said on Monday its profit soared more than four times to a record 856 million euros ($929 million) in 2023, boosted by high European interest rates, allowing it to resume dividend payouts.

It said in a statement that, after a year in which the lender did not pay any dividends, it will propose to distribute 30% of the 2023 net profit to shareholders.

CEO Miguel Maya told a press conference that the record profit "was supported by an increase in the bank's core income and intense management of operating costs", despite high provisions at its Polish subsidiary, Bank Millennium.

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"2023 was the year of transition and the bank is now clearly prepared for the future, with robust capital and finally an adequate level of profitability," Maya said, adding that the return on equity stood at 16% compared to an average ROE of 1.1% over the last 10 years.

The bank said net profit in the domestic business more than doubled to 724.9 million euros.

Its 50%-owned Polish unit had a net income of 127 million euros in 2023 after a loss of 217 million euros a year ago, despite 623 million euros in provisions for legal risks in its portfolio of Swiss franc mortgage loans.

Total accumulated provisions now cover 82.5% of that portfolio, Maya said.

The Portuguese lender's consolidated net interest income, or earnings on loans minus deposit costs, rose 31% to 2.83 billion euros in 2023, while core income, including NII and fees, rose 23% to around 3.6 billion euros.

Its cost-to-income ratio dropped to 32% from 38% a year ago and the bank reduced total non-performing exposures by 12% to 1.95 billion euros.

The bank's CET1 capital ratio rose 293 basis points to 15.4%, above the minimum required of 9.41%.

($1 = 0.9215 euros)

(Reporting by Sergio Goncalves; editing by Andrei Khalip and Sharon Singleton)