Bank of Portugal halts sale of Montepio investment fund
The Bank of Portugal has frozen Montepio’s capital investment fund on the grounds the product lacks transparency.
The fund was advertised through branches of Caixa Económica Montepio Geral (CEMG) under the name Capital Certo.
But the Governor of Portugal’s central bank, Carlos Tavares, has temporarily blocked the sale of the product at the bank.
The name of the savings product is to change to Poupança Mutualista to make it clear to customers which institution is promoting its sale.
The product has similarities to a bank deposit but is not protected under the Deposits Guarantee Fund.
The concerns surround the information given to customers buying the product. Customers are presented with 10 pages of detailed information that is so difficult to understand that Carlos Tavares wants to reduce the small print to just three pages: one linking it to the bank, another with the characteristics of the product and, finally, one with the financial indicators of the bank itself.
Montepio started 2018 with a €67 million margin deficit for the first quarter, forcing the bank to find new ways of attracting revenues for the year – it had planned to attract €970 million through such products.
The institution promised guaranteed returns on the savings product of 1.00% in the first year and 2.25% on the last year of the subscription period 2018-2024.