Banco Comercial Portugues SA: Q2 preview: Core revenue momentum continues

Research evidence excerpt

Banco Comercial Portugues SA: Q2 preview: Core revenue momentum continues

ing revenues but

earnings still constrained by provisions, albeit from a relatively small contribution to Group

profit at €4m.

Capital: Broadly stable; upside skewed to H2. We expect CET1 to remain broadly stable at

c.15.0%, as the accrual of c.90% of earnings towards shareholder remuneration largely offsets

capital generation in the quarter. Unlike Q1 and Q3, Q2 does not include the periodic catch-up

adjustment relating to minority interests following the approval of subsidiary accounts, which

provides a cleaner read on underlying capital generation. Looking ahead, capital generation

should strengthen into H2, supported by additional SRT transactions (potential RWA relief of c.

€1-2bn) and higher regulatory requirements in Poland, which management believes could

reduce excess minority capital and provide a c.15-20bp benefit at Group level. We continue to

assume an 80% payout for FY26, although management reiterated that a move towards 90%

remains achievable subject to further RWA optimisation.

Investor focus. We believe investors will primarily focus on three areas. First, whether stronger

commercial momentum in Portugal can continue to support around low double-digit NII growth

in FY26 and, more importantly, whether the combination of continued strong commercial

activity and a more supportive Eurozone rate outlook can sustain above-consensus NII growth

into FY27. Our rates team expects a final 25bp ECB hike in September, after which policy is likely

to remain on hold through end-2027 (Link). Second, attention will likely turn to whether Bank

Millennium can deliver broadly stable to modestly growing NII in FY26 despite c.200bps of