Caixa Geral and Novo Banco enjoy best performance indicators in Portugal

The consultancy Alvarez & Marsal has evaluated the performance of financial institutions in Portugal in 2023 and come to the conclusion that banks Caixa Geral de Depósitos and Novo Banco were the leaders in terms of performance.

Alvarez & Marsal is led in Portugal by Mário Trinca while the former CEO of Novobanco, António Ramalho is its senior consultant.

In the report ‘Bank Pulse 2023’ the consultancy analysed in detail the performance of Portugal’s financial institutions across a range of indicators for Portugal alone in a way that made it possible to make comparisons.

The banks considered in the study were Caixa Geral de Depósitos (CGD), BCP, BPI, Santander, Novo Banco, Caixa de Crédito Agrícola and Banco Montepio.

There were six categories to the study — growth, liquidity, revenues, and capital — each having one or more indicators with a classification given for each bank and Portugal’s banking system as a whole. Marks were given from 1 (the best) and 4 (the worst).

Taking all the factors into consideration, the consultancy concluded that the best performance last year was from CGD with a score of 1,2, followed by Caixa de Crédito Agrícola and Novobanco, both with 1.3.

The public bank did not, however, have the best classifications in isolation in any single criteria but came in first place when all the criteria were taken as a whole (liquidity, profitability, risk and capital). Nevertheless, it got the best average.

For example, its credit risk management was perfectly aligned with the European average while its ratio of NPL credit to cover doubled the average of the other banks.

In terms of its restructuring results, Novobanco was considered a normal player with a fairly positive performance with its past problems behind it.

Its performance could be taken into account regarding the bank’s future IPO or selloff in which Alvarez & Marsal are totally interested in taking part in since the more value a bank gains, the more demanding it is for an investor since buyers like to buy on the cheap.

In third place was Crédit Agrícola, which has the largest network of branches in Portugal out of all of the banks, and was one of the banks that saw the least reduction in deposits and managed to grow its loans base.

The consultancy says that Santander, BPI, and CGD are the banks with the lowest NPL ratios, aligned with the European average.

Overall, the banks with the lowest scores were Santander (1.4) and Montepio (1.6). The latter enjoyed the biggest gain from 2.5 to 1.6. “Montepio has been gaining ground on all sides”, says Mário Trinca.

Alvarez & Marsal was founded in New York in 1983. It has 7,500 staff, and 77 offices in 34 countries. It worked on the restructuring of Lehman Brothers after its collapse in 2008.