Interest rate hikes help double BNU’s profits in first half

Banco Nacional Ultramarino (BNU) in Macau yesterday announced profits of MOP288.4 million (32.7 million euros) in the first half of the year, a year-on-year increase of 125.2%.

The rise in profits was driven “mainly by the increase in net interest income, which grew by MOP139.2 million or 40.8%, due to higher interest rates,” the bank said in a statement.

The Monetary Authority of Macao approved three increases in the main benchmark interest rate in the first half of this year, the last of which was a 0.25 percentage point hike introduced in May, following the US Federal Reserve.

“On the other hand, net fees and commissions decreased MOP12.3 million, or 20.9%, compared to the first half of 2022,” although they rose 2.4% compared to the first quarter of 2023, BNU said.

The bank argued this development indicates “a gradual, albeit slow, economic recovery” in the Chinese special administrative region.

Macau’s gross domestic product grew 38.8% in the first three months of the year, compared to the same period in 2022, after five consecutive quarters of decline.

The Statistics and Census Bureau stressed the city’s economy is still only two-thirds of the levels seen before the Covid-19 pandemic.

BNU also revealed that it suffered losses of MOP18 million on non-performing loans and financial investments in the first half of the year, two-thirds less than in the same period of 2022.

The bank said operating expenses grew 2% compared to the first half of 2022, mainly due to “increased digitalization expenses”.

BNU said it “maintains a solid solvency ratio of 24.2% (…), well above the minimum regulatory requirement of 8%, and maintains high levels of liquidity” and that “BNU’s results in the first half of 2023 (…) demonstrate its strength and resilience in a highly volatile economic environment.”The bank reported profits of MOP122.4 million in the first three months of 2023, triple that recorded in the same period last year.

BNU is headquartered in Macau and belongs to the Caixa Geral de Depósitos (CGD) Group, and is, together with the Bank of China, a currency-issuing bank in the MSAR. MDT/Agencies