PROFITS AT Portugal’s main four banks have fallen 43 per cent in the first quarter of this year.
Convulsions in the international credit market, the sub-prime mortgage lending crisis, the downturn in the Iberian property and construction market and the overall sluggishness of the Portuguese economy have all contributed to a climate of pessimism in the country’s financial sector.
In the specific cases of Millennium bcp and BPI, financial irregularities and investigations and failed buyout in 2007 were the determining factors in negative results with profits down by 67 per cent for BCP and 95 per cent for BPI.
BPI registered losses of around 66.3 million euros in the second quarter compared with profits of 97 million euros in the same period in 2007.
The bank presided over by Fernando Ulrich accepted it had lost a total potential value to the tune of 157 million euros because of its links to BCP and the devaluation of BPC shares.
In the case of BCP, led by Carlos Santos Ferreira, losses associated with a drop in its shares meant 177 million euros had been wiped off the bank’s balance books, although it has managed to retain its share in BPI which accounts for 9.9 per cent.
Its profits plummeted 67.2 per cent in the first half of 2008 and 25 per cent in the second quarter from 117 million euros to 87 million euros.
Banco Espírito Santo faired the best of the Portuguese banks with profits falling 28 per cent in the first half of 2008 and 19 per cent in the second quarter to 118 million euros.
However, there was better news for Spanish-owned multinational bank Santander Totta, presided over in Portugal by Nuno Amado, with profits at nearly 273 million euros representing a modest growth of 0.7 per cent.
The President of BES, Ricardo Salgado, said he believed that the economic and financial situation would recover globally and nationally next year and that he had already detected some positive signs which would allow the European Central Bank to reduce its inter-banking lending interest rates.
BES registered profits of 264.1 million euros, the highest in the Portuguese private banking sector.
“This year will be extremely difficult with falling results, but even so we remain on course in fulfilling our targets for 2010,” said Ricardo Salgado.
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