What does the balance‑sheet composition (loans vs. deposits, liquidity coverage ratio) indicate about short‑term funding risk?

Answer

The short‑term funding risk of a bank is best judged by looking at two key balance‑sheet items that the H1 2025 report would normally disclose:

Applying this to Banco Comercial Português (BCP)

The brief news release you provided only announces that BCP has published its H1 2025 Report and Accounts; it does not contain the actual figures for:

• the Loans‑to‑Deposits ratio,
• the composition of deposits versus other funding sources, or
• the Liquidity Coverage Ratio.

Because the specific numbers are missing, we cannot calculate or comment on BCP’s current short‑term funding risk with certainty.

What you can do next

1. Retrieve the full H1 2025 report (usually available on BCP’s investor‑relations website or the regulator’s filing portal).

   • Look for the “Liquidity and Funding” section, where the LCR, Net Stable Funding Ratio (NSFR), and the breakdown of deposits vs. wholesale funding are disclosed.
     
   • Check the “Loan Portfolio” note for the total loan amount and the “Deposits” note for total customer deposits.

2. Compare the ratios to historical and peer benchmarks:

   • Loans‑to‑Deposits: Portuguese banks typically keep this ratio in the 80‑95 % range. If BCP’s ratio is significantly higher, it may be taking on more short‑term funding risk.
     
   • LCR: The European Central Bank (ECB) requires a minimum of 100 % for all Euro‑area banks. An LCR of 110‑130 % is common for well‑capitalised Portuguese banks. Anything below the floor would be a red flag.

3. Assess the quality of deposits:

   • Retail vs. corporate deposits: Retail deposits (especially “core” or “stable” retail) are considered the most reliable source of short‑term funding. A heavy reliance on large corporate or “run‑off” deposits can increase vulnerability.
     
   • Maturity profile: Short‑term (≤ 12 months) deposits versus longer‑term deposits affect the net cash‑outflow calculation used in the LCR.

4. Monitor market‑based funding trends:

   • If BCP is issuing a sizable amount of covered bonds, commercial paper, or other wholesale instruments, the L/D ratio will rise and the LCR may be pressured if those instruments are not classified as HQLA.

Bottom line

• Without the actual balance‑sheet data, we cannot definitively state BCP’s short‑term funding risk.
  
• If the forthcoming H1 2025 report shows a modest Loans‑to‑Deposits ratio (well under 100 %) and an LCR comfortably above the 100 % regulatory minimum, the bank’s short‑term funding risk would be considered low.
  
• Conversely, a high Loans‑to‑Deposits ratio coupled with an LCR close to the floor would suggest heightened vulnerability to liquidity stress.

Recommendation: Obtain the detailed H1 2025 financial statements and focus on the “Liquidity Coverage Ratio” and “Deposits vs. wholesale funding” disclosures to make a precise assessment of BCP’s short‑term funding risk.