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Novo Banco swings to Q1 profit from year-ago loss

Novo Banco SA reported first-quarter consolidated net income attributable to shareholders of €60.9 million, compared to a loss of €130.9 million in the first three months of 2017.

The Portuguese lender, which was acquired by U.S. private equity firm Lone Star in 2017, said the result includes a positive effect of €51.2 million due to the classification of insurance unit GNB Vida as a discontinued operation. Excluding the amount, Novo Banco's net income for the first quarter would have amounted to €9.7 million.

Net interest income in the quarter totaled €97.4 million, down from €119.0 million a year earlier. Fee and commission income was €93.1 million in the period, compared to €93.9 million a year earlier, while fee and commission expense fell year over year to €16.3 million from €21.8 million.

Net gains from financial assets and liabilities at fair value through profit or loss amounted to €8.8 million, compared to losses of €24.3 million a year ago. Net gains from financial assets at fair value through equity increased year over year to €21.9 million from €17.1 million.

Impairment losses on loans, net of reversals and recoveries, declined to €50.1 million from €119.3 million a year earlier.

Novo Banco's common equity Tier 1 ratio stood at 13.5% at the end of March, up from 12.8% at 2017-end and 10.8% a year ago.