Montepio rules out sale

The current president of mutual bank Montepio has ruled out the bank being sold off and has stressed that the bank does not require further capitalisation.

In an interview with newspaper SOL, Virgílio Lima said that the clouds that had been swirling over the institution have cleared, with the bank’s financial situation in a healthier place with €70 million in savings in 2020 and €100 in 2021 to October.
He also said the bank has new members: “In the final quarter of 2020 I had seen membership grow and continue to grow in 2021, with 602,800, revealing a resilience and confidence shown by the members in the mutual banking association”.
Lima said that during periods of crisis, the importance of mutual institutions comes to the fore, and this has been reflected by an extraordinary growth in membership because “people identify with the solutions that mutualism provides and this explains the current increase in numbers”.
The banker said that the presence of the insurance watchdog Autoridade de Supervisão de Seguros is beneficial because “it represents another independent supervisor which is monitoring and validating Montepio’s management”.
“We have internal control and validation mechanisms in the form of our general assemblies, internal and external auditors, a fiscal board, and now an independent supervisor which is a factor for confidence that is welcome,” he said.
He added that in the association’s 180-year history it had never not complied or defaulted on its commitments to its members, and that even in 2020, an untypical year, it had distributed dividends to members.
“We improved things for our members in terms of profits, results that were beyond the expectations of members at the time they joined. The best guarantee for the group is its solidity, that it gives results, that the group is managed well overall, and generates positive results”, he said.
The Montepio Group has posted positive results of €17 million to October; its banking arm saw results of €19 million in the last quarter, while all other parts of the group are also registering positive results — compared to a consolidated loss of €86 million in 2020.
Lima explained that the bank had to factor in €70 million for moratoria and €24 million in restructuring costs.
The bank, he said, is currently meeting its plans that were approved by the shareholder and supervision and that overall was enjoying positive consolidated results.
Restructuring costs are related to the closure of branches and shedding of 450 staff through either early retirement or amicable agreement and, so far, with “no fuss”.
Montepio, formerly Montepio Geral, is a Portuguese mutual savings organisation, known for its banking activities. It was established in 1844.
The Montepio group is headed by the Montepio Geral – Associação Mutualista and includes the Banco Montepio (banking holding), the Lusitania (insurance company), the Lusitania Vida (life insurances), the Fundação Montepio (social solidarity foundation), the Futuro (pension fund management), the Montepio Gestão de Activos (investment fund management), the Residências Montepio (Senior residences management) and the Leacock (insurance broker company).