Sovereignty weighs on Portugal’s banking recovery

By:
Philip Moore
Published on:

Portugal’s banks are doing better than at any point since the eurozone crisis. But local bankers’ optimism is tempered by concerns over ownership issues at BPI, Banif and Novo Banco

"Although Portugal is a relatively concentrated banking market compared with Spain, the fact that it is a much smaller marketplace suggests that consolidation could contribute to some further improvement in efficiencies"
- Erwin van Lümich, Fitch Ratings.


Depending on your perspective, these are either the worst or the best of times for Portugal’s banking industry. 

Those who fear that investor confidence in the sector has taken a battering in recent months say that it was not just the messy bail-in of Novo Banco that has damaged the industry’s credibility. Other controversies have included the turbocharged resolution of Banif, which according to some bankers has wasted billions of euros of taxpayer money, to the recent schism among BPI’s shareholders over the management of its African exposure. 

Lisbon-based analysts say these are very different incidents, none of which need be unduly damaging for the Portuguese banking industry when...