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Banks refute accusations of heel dragging over company cashflow aid

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Portugal’s banks have deflected accusations that they are dragging their heels over granting cash-flow to Portuguese companies in dire straights because of the State of Emergency.

The leaders of Portugal’s banks have been called to parliament on this week for hearings (there are five scheduled) to give account of how they are making funds available to companies and families.
They are facing even greater scrutiny on the selection criteria they practice in deciding who gets support and the slow speed in which they are processing applications for financial support.
BCP has been the bank which has received the greatest number of complaints from micro and SMEs in this respect.
It comes as the Government admitted on Tuesday that measures to support the Portuguese economy were costing €2.7Bn a month, with companies already asking €4.8Bn in credit from the credit lines made available, of which €558 has been approved.
Miguel Maya, President of BCP, was the second banker to be heard over measures to support the Portuguese economy following Pedro Barreto and João Oliveira Costa (directors of BPI). Santander was featured at the third hearing on Tuesday while CGD and Novo Banco will be called to hearings today.
Maya told the hearing that: “It will be very difficult for Portugal and the banks to retain their rating without a European solution to the Covid-19 crisis and this really worries me” he said.
“If we can manage to find a mechanism, you can call them Coronabonds or a European Recovery Fund whereby this debt could be dealt with automatically so as not to prejudice the public debt, I would have no doubt that these support measures would be insufficient” he said.
He went on to stress that BCP could not have a positive rating if the Portuguese State had a negative rating and that a rating downgrade would mean that it would cost more to get finance on the International lending markets for all; banks and Government.
Miguel Maya has set the example for the other banks by refusing his bonus at the bank after writing to the bank’s president of the board of directors saying that they were not in a condition to pay bonuses to the members of the executive commission.
He told the parliamentary hearing of the Economy, Finance and Budget Commission on Tuesday that the bank had granted 80,000 moratoria on loans worth €4.5Bn.
The CEO of Millennium bcp was heard on the same day as the CEOs of BPI and Santander on the granting of loans to companies and moratoria on loans.
According to Miguel Maya, BCP has granted 25,000 moratoria worth €2.2Bn to which are added to the 55,000 moratoria worth €2.2Bn granted as part of the moratoria from the State and Portuguese Banking Association.
He said that 54% of applications for loan repayment freezes came from micro-companies and 9% of the total. SMEs made up 44%, corresponding to 78% of the amount whole large companies made up 2% of the applications and just 3% of the total.


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