Banking and finance in Portugal
Opening a bank account in Portugal usually requires a few documents, a minimum deposit, and a visit to a branch.
The central monetary authority that oversees banks in Portugal is Banco de Portugal. It is a member of the European System of Central Banks (ESCB).
Portugal, a member of the European Union, operates a modern banking system that offers advanced financial products. In fact, it oversees one of the world’s most advanced interbank networks.
Portugal has recently come out of an unprecedented restructuring of its banking sector.
In the previous decade, following the global financial crisis and subsequent sovereign debt crisis, great energy has been put to ensure that Portuguese banks are more resilient.
Pursuant to a similar EU agenda, banks are today stronger in terms of leverage, and capital and liquidity levels, to deal with economic challenges.
For instance, Tier I capital ratios have doubled since 2010, non-performing loans ratios have decreased to around 5%, and coverage ratios increased to 55%.
In 2020, credit granted by banks to the private non-financial sector totalled around EUR235 billion (100% of the GDP), with a slight increase compared to 2019 figures.
In addition, Portuguese banks registered a small increase in deposits, attributed to a reduction in household consumption. Interest rates continued their downward trajectory, converging to Eurozone averages.
The cost of credit for private non-financial businesses averaged 2% in 2020. However, the returns of the banking sector decreased, mostly given to increases in provisioning requirements.
ROE in the Portuguese banking sector averaged between 1% and 2%, and cost-to-income ratio was at 58% to 60%, in 2020.
In April 2021, Moody’s Investors Service changed its outlook on banks in Portugal from negative to stable, reflecting stronger economic conditions as the region recovers from the coronavirus pandemic.
They expect that any deterioration in Portuguese banks’ asset risk will be moderate and that their profits will pick up as European economies recover following a sharp fall in real GDP during the coronavirus crisis.
The biggest banks in Portugal are:
Caixa Geral de Depósitos
Founded in 1876 in Lisbon, state-owned financial institution Caixa Geral de Depósitos (CGD) is the largest of the banks in Portugal in terms of total assets and the country’s largest public-sector banking corporation. In 2020, it ranked 179th on the list of major banks in the world according to “The Banker.”
The bank operates through 948 branches, representative offices, and direct equity interest in local financial institutions in 23 countries located on four continents.
Banco Santander Totta S.A.
Banco Santander Totta S.A. is the third-largest private bank in Portugal in terms of total assets. With headquarters in Lisbon, it employs 6,000 staff in more than 497 branches.
The Portuguese bank traces its roots back to 1864 when it was formerly known as Banco Totta & Açores and Banco Totta later. Global Finance named Banco Santander Totta S.A. the Safest Bank in Portugal, while Euromoney recognized it as the Best Bank in Portugal.
Banco Comercial Portugues
With more than 1,380 branches in Portugal and servicing almost 4.3 million customers all over the world, Banco Comercial Portugues is the second largest of private banks in Portugal in terms of total assets.
It was established in 1985 by Jardim Gonçalves and investors from the Porto region. The bank’s headquarters is in Oeiras, Greater Lisbon.
Banco Internacional do Funchal
Banco Internacional do Funchal, S.A. was founded in 1988, offering a wide range of banking and financial products and services, including retail, commercial, and investment banking.
Headquartered in Lisbon, the bank operates within the country and in the rest of the European Union, Latin America, and North America.
Banco Popular Portugal
Formed in 1991, Banco Popular Portugal was formerly known as BNC-Banco Nacional de Crédito, S.A. In 2005, the bank changed its name to Banco Popular Portugal, S.A. Based in Lisbon, it is a subsidiary of Banco Popular Español, S.A.
Banco Popular provides services to private citizens, self-employed people, SMEs, private welfare institutions, large corporations, financial institutions, and the public administration sector, operating through retail and commercial banking, as well as other segments, in 118 branches.
Portuguese bank Nova Banco offers retail and investment banking, insurance, asset management, and venture capital services.
In 2014, it was introduced to the Bank of Portugal to rescue Banco Espiritu Santo, one of Portugal’s oldest and most reputable private banks. Novo Banco’s headquarters is in Lisbon.
As of 2019, the bank managed a network of 387 domestic branches and four international branches and employed a total of 4,582 individuals in Portugal and other countries.
Commercial banking group Banco Português de Investimento (BPI) specializes in home loans through different outside companies. It oversees 883 branches, servicing over 1.4 million customers, individuals, businesses, and institutions.
The bank maintains a presence in Portugal and Spain and in countries such as Angola, where it is the market leader in corporate banking, and in Mozambique, where it owns 30% shares of the bank BCI Fomento.
Caixa Central de Crédito Agrícola Mútuo, C.R.L.
Headquartered in Lisbon, Caixa Central de Crédito Agrícola Mútuo, C.R.L. provides a range of banking products and services, including commercial and retail, investment fund and asset management, insurance, and consultancy services.
The bank comprises Commercial/Retail Banking, Investment Fund and Asset Management, Insurance, and Consultancy segments.
Banco Privado ATLANTICO – Europa
Founded in 2009, European bank ATLANTICO Europa operates as a subsidiary of Atlantico Financial Group S.A. Based in Lisbon, it provides a wide range of banking products and services for individuals and companies in more than 50 countries.
The ATLANTICO brand was formed in 2006. It established a presence among the banks in Portugal as Banco ATLANTICO Europa, in accordance with its goal of becoming a global brand. It currently serves about 10,156 customers and employs about 129 individuals.
Banco Finantia, S.A.
Headquartered in Lisbon, Banco Finantia, S.A. is a subsidiary of Finantipar-S.G.P.S., S.A. The bank provides private, corporate, and investment banking solutions in Portugal and in other countries.
The group’s private banking activities are focused on the Iberian Peninsula, while its corporate and investment banking solutions are centered in the Iberian Peninsula/Latin American corridor and in the markets of Turkey, Russia, and the Commonwealth of Independent States.
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