Portugal’s banks rake in €1Bn in H1

Portugal’s banking system has finally fully recovered from a series of disasters including over-leveraged lending, capital ratio crises, banking failures and, of course, the pandemic over the past 10 years which had all contributed to weakening the nation’s banks.

Bank profits soared by 75% overall in the first half of 2022 with one news source Eco asking if “profits are falling from the sky”?
Portugal’s banks, Novobanco, Santander, Millennium bcp, BPI, and Caixa Geral de Depósitos had increased their core capital ratios, exercised more prudent lending policies, undergone profound digital modernisation and structural reforms.
They have also increased lending and bank service charges, shed tens of thousands of staff, closed countless branches up and down the country, switched over to mobile and laptop banking and, most importantly, shed hundreds of millions of euros in bad loans also known as Non Performing Loans since 2011.
The result of this powerful reform of the system has resulted in bank profits of €1Bn across the board.
However, most bankers dismiss the idea that profits are “generalised” and that profits are falling from the skies, and warn that the system still has a long way to go to become truly profitable. The banks have also dismissed the idea of a extraordinary tax of the type introduced by the Spanish government.
On 12 July, Spain said it would implement temporary taxes on power companies and banks that raked in €7Bn ($7.02 billion) in 2023-2024 to help Spaniards cope with soaring inflation. The announcement triggered a selloff in some banking shares.
And President Marcelo Rebelo de Sousa has not ruled out a tax on banks and energy companies in Portugal.
BCP profits were up 500%, Santander Totta profits soared 200%, Caixa rose by a modest 65%, BPI were up 17%, and Novobanco profits are also expected to be up.