Portuguese banks have best results in 15 years
Portuguese bank profits soared by 50% in 2022 to €2.97Bn in the best result since the global financial crisis of 2007 according to calculations from the Bank of Portugal.
The strong result was achieved thanks to an increase in financial margins and because of less impairments and provisions explains the central bank led by Mário Centeno.
It was the fifth year running in which the sector registered positive results and followed one of the blackest period’s Portugal’s banking sector had suffered (2011 to 2017) since 25 April Revolution. Between 2011 and 2017 the Portuguese banking sector had accumulated losses of €13.7Bn and saw the collapse of two major banks: Banco Espírito Santo and Banif.
Since then, the banks have improved and accumulated their profits to €8.3Bn. In 2022, profits soared as a result of higher interest rates from the European Central Bank, improving financial margins by €1.38Bn to €7.5Bn — the highest amount since 2011.
At the same time the banks also saw a fall by around €600 million in costs because of a reduction in impairments and provisions.
No only this, the banking sector in Portugal has under gone considerable restructuring and cos-cutting with the closure of 196 branches to 4,626.
“The number of branches in Portugal has fallen uninterruptedly since 2010, totalling less than 3,090 branches (-48%)”, according to the Bank of Portugal.
Last year Portugal’s banking sector took on a further 119 employees, bucking a downward trend of the banking sector shedding jobs as online and mobile banking and digitalisation of processes and paperwork became commonplace. Most of the employees were taken on by one bank whose service provision increased overseas.