Banking sector to speed up support for companies

Portugal’s banking sector has stepped up to the plate by making an unequivocal commitment to support the Portuguese economy over the crisis caused by the Covid-19 pandemic.

In addition to speeding up the allocation of Government funds announced two weeks ago, it will provide a raft of financing measures “off its own back”.
In a joint communiqué issued after Monday’s meeting with President Marcelo Rebelo de Sousa, BPI, Caixa Geral de Depósitos (CGD), BCP, Novo Banco and Santander have made “an unequivocal commitment to support the Portuguese economy”, agreeing that they were “aware that the enterprise network is essential for society to function and for the future solidity of the banks themselves”, in other words it is in their own best interest to do so.
The move comes after the banks came under increasing criticism, some of it unfounded, for profiteering by making Government loans available while charging considerable spreads of up to 3%.
This was followed by a barrage of indignation on social media platforms which referenced the avalanche of bank scandals which had even resulted in bank collapses caused by rash and imprudent lending, often over-leveraged, over the past 15 years for which the Portuguese taxpayer had had to pick up a tab of up to €23Bn.
Within this context and “respecting all the guidelines from the Directorate-General of Health, a large number of bank branches will remain open to the public” so as to facilitate the evaluation and processing of applications for public and private funding and “guarantee that all citizens are included.”
Without abandoning “necessary prudence” or “putting at risk the interests and security of depositors,” the banks have also committed to a ‘period of grace’ on some loans and mortgages and to speed up the distribution of public funds to companies and families.
In the communiqué, the banking sector states a “strong commitment” to cooperating with the “President of the Republic, the Government and relevant institutions to seek and implement the most suitable measures to help Portuguese citizens and those who live in Portugal at this very difficult time that the country is going through.”
The President summoned the presidents of BPI, CGD, BCP, Novo Banco and Santander to “share their reading of the economic situation and convey a number of concerns regarding the importance of the financial system in supporting the economy.”
The meeting also served for Marcelo Rebelo de Sousa to “gauge what measures the banks were taking and hear their own respective concerns.”