LISBON, Sept 28 (Reuters) – Portugal’s largest private bank, Millennium bcp, is focused on growing its existing business and not looking at a merger with smaller, loss-making rival Montepio, its chief executive Miguel Maya said on Monday.
Maya, speaking to reporters at a conference, was asked about a report in the weekly Expresso on Saturday that said Millennium bcp was available to merge with Montepio, which is preparing a major restructuring.
“Millennium bcp’s growth strategy in Portugal is through organic growth”, Maya responded.
“This is where I stand firmly, especially in a complex moment like the one we are living, when protecting the balance sheet is an absolute priority for us.”
Maya said he had made no contact with Finance Minister Joao Leao about Montepio, “nor are we analysing any (M&A) operation with Montepio”.
Portugal’s banking industry is highly concentrated, with the five largest banks accounting for over 80% of credit and deposit volumes.
Millennium bcp is about five times larger than Montepio in terms of assets, credit and deposits. It has 493 branches in Portugal compared with Montepio’s 328.
“As a manager, I have the obligation to look at all (M&A) operations that can be placed in the market … (but) as far as I know there are no such operations in the market,” Maya said.
European banks are under pressure to join forces to deal with rising bad debts due to the COVID-19 pandemic and record-low interest rates.
Caixabank, for instance, is buying Bankia for 4.3 billion euros in an all-share deal that will create Spain’s biggest domestic lender.
Millennium bcp’s net profit fell 55.3% to 76 million euros in the first six months of 2020, with a sharp increase in provisions due to the pandemic, while Montepio made a loss of about 51 million euros against a profit of 3.6 million a year earlier. ( Reporting by Sergio Goncalves; Editing by Catarina Demony and Mark Potter)