(Adds planned exchange offer)
LISBON Jan 30 Portugal's third-largest listed
bank BPI posted a steeper-than-expected 73 percent
fall in 2013 net profit on Thursday, pressured by the high cost
of state loans that the bank hopes to repay soon.
BPI holds 920 million euros in state loans in the form of
contingent convertible bonds carrying high interest payments and
in October the bank requested authorisation to repay 588 million
euros of that sum early.
The bank expects to repay 500 million euros in the first
quarter, it said.
It also plans to hold a voluntary public exchange offer to
swap debt notes convertible into shares held by various private
investors for new shares, which would reinforce its core Tier 1
capital ratio allowing to make the CoCo repayments without
weakening its core capital.
"Assuming an acceptance rate of 100 percent, the bank
estimates a positive impact on shareholders' equity in the
amount of 123 million euros," BPI said.
The state made an injection of funds via CoCos in 2012 for
various Portuguese banks to meet strict solvency criteria under
the country's bailout. BPI has already repurchased 380 million
euros in CoCos.
Net profit fell to 66.8 million euros ($90.6 million), while
analysts surveyed by Reuters had expected, on average, a net
profit of 79 million euros. Aside from CoCos, it was affected by
sales of government bonds that had brought in strong interest
payments in 2012 and a drop in net interest income.
BPI's domestic operations had an overall loss of 28 million
euros, while its international division led by Angola
contributed with some 95 million euros in profits, which was 10
percent higher than a year ago.
BPI's total net interest income -- the difference between
interest charged on loans and interest paid on clients' deposits
-- fell 18 percent to 475 million euros.
BPI shares had closed flat at 1.54 euros before the results
($1 = 0.7373 euros)
(Reporting By Daniel Alvarenga and Andrei Khalip; Editing by