Portugal's Novo Banco nine-month profit jumps 49%, capital grows

LISBON, Nov 2 (Reuters) - Portugal's fourth-largest bank, Novo Banco, posted on Thursday a 49% increase in nine-month net profit, citing rising interest rates but also business growth and stronger capital.

The unlisted lender, which emerged from the ruins of failed bank BES in 2014 and has been 75%-owned by U.S. private equity Lone Star since 2017, netted a consolidated 638.5 million euros ($677 million) between January and September.

Chief Executive Mark Bourke said in a statement that Novo Banco continues "to deliver very strong results", is profitable and has "a strong and liquid balance sheet and continues to see customer franchise growth".

Net customer loans increased by 0.5% to 24.67 billion euros.

Novo Banco said its consolidated net interest income (NII), or earnings on loans minus deposit costs, more than doubled to 831 million euros in the nine months, benefiting from interest rate hikes by the European Central Bank.

Novo Banco's fully loaded Common Equity Tier 1 solvency ratio rose to 16.5% in September, 340 basis points higher than a year ago, while its commercial cost-to-income ratio dropped.

Net impairments and provisions increased to 81.7 million euros from 22.5 million a year ago.

Non-performing loans dropped to 1.2 billion euros, or 4.2% of total loans, in September from 5.7% a year earlier. In 2017, when Lone Star acquired control, the share of bad loans was 28%.

($1 = 0.9433 euros) (Reporting by Sergio Goncalves; editing by Andrei Khalip)