The Portuguese Banking Association (APB) considers that banks “have not obtained many benefits”, because it is necessary to evaluate the profitability of capital, and that the difficulty in accessing real estate credit is due to factors external to the banks.
The president of the Portuguese Banking Association (APB), Vítor Bento, spoke with Lusa about the conference that marks this Tuesday the 40 years of the APB (founded in October 1984), dedicated to the role of banking in economic and social development, the manager highlighting the importance of banking in access to home ownership in Portugal.
“If it were not for bank credit, most families would not have had access to housing. “I estimate that around two thirds of families in Portugal own a home thanks to bank credit,” said the president of the APB, adding that the interest rates on this credit in Portugal were, in the last 20 years, lower than the eurozone average.
Regarding the difficulties that many families experience in accessing housing credit, Vítor Bento said that this is due to exogenous factors (house prices, income) and not to banking restrictions.
“Access is quite easy. The difficulties that people feel are external to credit conditions, they do not have difficulties accessing credit to the extent that they depend on banks. Banks are interested in granting as much credit as possibleas long as this credit is safe,” he stated.
Regarding the public guarantee that the State will provide for young people to access housing credit, which should be operational by the end of the year, Vítor Bento considered that the extent of the impact of the measure will depend on several variables, including adherence.
Regarding the position of the Bank of Portugal on this measure, which has warned to be carefulHe said that he understood both perspectives, that of the Government, which wants to support this population, and that of the Bank of Portugal, which wants to guarantee the quality of the loans and the resilience of the banks, but he predicted that they will be “reconcilable”.
In conversation with Lusa, Vítor Bento rejected the idea that the banks have obtained large profits, stating that You can’t just look at earnings in absolute value. and that “only in 2023 was the sector’s profitability slightly higher” than the average profitability of large companies in non-financial sectors.
“As for the question of benefits, which is a topic that is talked about a lot, we have to put things in perspective. Whoever talks about profits is looking at absolute values, but is not making comparisons with other sectors or with the volume of capital needed to generate those profits. The banking sector is, as a sector, the one that has invested the most capital in its activity, around 40,000 million euros,” he stated.
Banking regulators and supervisors have been warning banks to use some of current profits to increase “capital buffers” to be better prepared for future crises.
Asked if banks are distributing profits above what they should, Vítor Bento rejected this idea and recalled the high capital levels of Portuguese banks.
Regarding the measure recently adopted by the Bank of Portugal to force banks to reinforce ‘capital buffers’ (by creating an anticyclical reserve in 2026), the president of the APB stated that from a “strictly financial is complacent”, but that “the more capital is tied up in the banks, the more Banks need to be more profitable. to be able to attract capital from investors,” which is why he defended balance.
“It is this balance that will have to be sought between what is reasonable in the requirement of capital ratios and how much profitability is necessary to ensure that sustainability,” he stated.
Vítor Bento also considered that banking is a sector with “excessive taxes”stating that as a result “the banks that create jobs in Portugal have a disadvantage [competitiva] compared to banks that create jobs abroad”, even if they operate in Portugal.
The State Budget proposal for 2025 maintains the contribution to the banking sector, which is estimated to raise 210 million euros, and the additional solidarity tax, another 40.8 million euros. Two weeks ago, the Public Ministry asked the Constitutional Court to declare unconstitutionality of this additional taxafter three decisions of the Constitutional Court in this regard.
Public Ministry requests unconstitutionality of additional tax on banks
For Vítor Bento, the decisions of the Constitutional Court support the APB’s position “that there is no rational and reasonable basis to maintain this additional payment that was created at a very special time, in which we are experiencing the pandemic.”
The budget proposal also includes a reduction in the IRC (corporate profits tax) rate from the current 21% to 20%, which mainly affects large companies such as banks.
APB is the association that represents companies in the banking sector. It was created on October 17, 1984 to defend the interests of its members, its partners being the main banks operating in Portugal.
Of the banks that founded the APB, 40 years ago, several have already disappeared, such as Banco Espírito Santo (BES), or were purchased and merged with others, such as Banco Totta & Açores. It currently has 26 partners, including Caixa Geral de Depósitos, BCP, Novo Banco, Santander, BPI, Montepio, Crédito Agrícola.
The APB celebrates its 40th anniversary this Tuesday with a conference in Lisbon on ‘The role of banking in economic and social development’, attended by the Minister of Finance, Miranda Sarmento.
Source: Observadora
