Best bank: Banco BPI
The fourth-biggest bank in Portugal, which has been fully owned by Spain’s CaixaBank since the end of 2018, saw an exceptional performance in 2023. After record results for the firm across the board, Banco BPI is clear winner of the award for Portugal’s best bank.
Net profit from the Portuguese business rose 86% to a record €444 million. Overall net interest margin for the Portuguese banking sector hit 4.4% in 2023, compared with an average of 2% in the period from the global financial crisis to 2022. BPI’s margin stood at 3.75%.
But the boost to profits handed to banks around the world by the post-pandemic rise in interest rates is only part of the story at BPI. The bank has focused relentlessly on efficiency and building up its digital credentials – as well as simply pushing harder for business.
The bank introduced a new kind of branch during 2023, which it calls the All in One. It is in Lisbon and is a state-of-the-art space where clients can use all manner of physical and digital banking services. Among the bank’s other digital developments is a system that allows clients to handle the deeds for housing loans remotely, with digital deeds authenticated with digital solutions and mobile keys.
The bank’s loan book rose 3% to €30 billion, with the increase widely dispersed across sectors. The bank claimed a share of 12.4% of Portuguese corporate loans, its highest level ever, while a 14.4% share of mortgages was another record.
Customer loans rose 1%. Non-performing loans fell and the NPL ratio dropped 10 basis points to 1.87%. The bank posted a big increase in return on equity, rising from 10.1% to 14.6%, with recurrent return on tangible equity in Portugal hitting 16%. Fitch and Moody’s both upgraded the bank’s ratings during 2023.
The bank is continuing to build its already dominant 24% market share in Portuguese private banking and onboarded 900 affluent clients in 2023. To service its growing business, it has now launched BPI Wealth, an advisory practice for the bank’s high net-worth clients.
Writing in the bank’s annual report for 2023, BPI chief executive João Pedro Oliveira e Costa acknowledged the effect of monetary policy on the bank’s results but argued that BPI’s commitment to lending, its willingness to renegotiate mortgage loans for struggling customers, its conversative approach to credit risk and its strategic commitments to digitization and sustainability had all played their part in what had been the firm’s “best financial year ever”.
Best investment bank: CaixaBI
Portuguese public capital markets activity is low at the best of times and 2023 was little different. But that did not mean there were no interesting stories behind the scenes. For its all-round performance as it repositions its business, CaixaBI wins the award for Portugal’s best investment bank.
At less than $10 billion of issuance in the year, the public debt markets were dominated by a €3 billion bond for Portugal and three deals for energy company EDP. CaixaBI was a co-lead on the sovereign deal, but it was the only Portuguese bookrunner on EDP’s innovative €1 billion 60-year green hybrid. The bank was also a bookrunner on the €1.35 billion two-tranche deal from EDP later in the year, the borrower’s biggest ever Eurobond.
A lot of Portuguese activity, however, is in the form of private placements and CaixaBI is the market leader there, claiming some 11 issues in 2023. These included a clutch of environmental, social and governance-related deals, such as the €75 million dual-tranche green bonds for cement company Secil and a €75 million issue of sustainability-linked notes for Sonae, the multinational conglomerate.
It was also placement agent on two retail bond issues that tapped into the fanatical support that football clubs Benfica and Porto are able to attract, with transactions of €50 million and €55 million, respectively.
The bank also arranged and led no fewer than 75 new commercial paper programmes in the year, including a €400 million programme for Galp. CaixaBI has also been building a new syndicated loans desk, which aims to take advantage of the considerable balance sheet of state-owned parent Caixa Geral de Depósitos.
One of the bank’s most notable advisory mandates was for wood pulp producer Altri, which listed its subsidiary Greenvolt in 2021 and has been continuing the spinoff through cash and in-kind dividend distributions in 2022 and 2023. CaixaBI’s work last year included all aspects of structuring the process, which is an innovative one for Portugal.
Best international bank: Banco Santander
Banco Santander had a strong year, underpinned by sound financial performance, good digital channel growth and sustainable and community-focused initiatives.
Profits were up by 57% to €894.6 million in 2023. The bank also expanded its customer base, increasing the number of active customers by 70,000; a 4% rise, bringing the total to 1.75 million.
On the digital front, total electronic customers increased by 6% to 1.18 million, with digital channel logins growing by 17.8% to 914 million. The number of digitally signed documents rose to 1.32 million from just 200,000 two years earlier.
In the environmental, social and governance area, the bank committed up to €250 million in loans for sustainability-focused sectors and financed climate transition projects worth approximately €1 billion.
It made significant contributions to community engagement and education, investing over €7 million in community initiatives. It supported approximately 45,000 individuals through its philanthropic efforts and awarded over 6,400 scholarships through 22 scholarship programmes.
Best digital bank: Banco BPI
Banco BPI has integrated innovative digital solutions to improve customer experience and streamline banking operations.
The bank enhanced its digital offering to small and medium-sized enterprise customers by launching Pulsoo, Portugal’s first app tailored exclusively to the segment.
It has also streamlined a range of retail banking processes. Its new artificial intelligence virtual assistant allows clients to perform transactions, payments and balance checks through voice commands. The bank has also launched a service that allows its customers to provide the deeds for housing loans remotely, which helped boost its mortgage portfolio by 3% year on year.
Banco BPI also ventured into the Metaverse and Web3, launching its first immersive reality store and D-VERSE, a platform for digital collectibles and non-fungible tokens.
It also rolled out its AGE Planet Craft Tycoon game, which integrated blockchain technology to facilitate interactive Web3 gaming.
Best bank for SMEs: Banco BPI
Banco BPI has enhanced its digital capabilities for small and medium-sized enterprises in Portugal, streamlining financial management and compliance through new technological solutions.
The bank unveiled Pulsoo, the first app in Portugal specifically tailored for SMEs, sole proprietors and self-employed professionals last year. Developed in partnership with the Portuguese telecommunications company NOS, Pulsoo integrates financial management with regulatory compliance and bridges a significant gap in the market. It links directly with the Portuguese tax authority, delivering alerts for compliance deadlines, providing access to tax documents and simplifying regulatory compliance for SMEs. It offers a consolidated view of financial data across different banks and allows users to connect their accounts.
The bank also launched BPI Public Support Reading Room, a digital platform that enables SMEs to identify national and European public support and subsidies available for business investments.
Best bank for ESG: Caixa Geral de Depósitos
Caixa Geral de Depósitos focused on environmental, social and governance (ESG) issues through sustainable financing work and product innovation.
The bank has approved corporate ESG policies covering sustainability, green financing, energy transition and environmental risk.
The bank’s sustainable financing for corporates increased by 37.4%, reaching €922 million in 2023. It led green bond deals for Secil and EDA, valued at €75 million and €20 million respectively, and worked on sustainability-linked bond offerings for Sonae MC (€95 million) and NOS (€75 million). The bank also led sustainability-linked commercial paper programmes for NOS and Almina.
The lender also introduced the first online ESG rating tool in Portugal. Since its debut in June 2023, this has generated 14,000 reports for companies, averaging 60 reports daily, offering enhanced ESG transparency and analysis.
Best bank for corporate responsibility: Banco Santander
Banco Santander has demonstrated a strong commitment to corporate social responsibility in Portugal, particularly in supporting education and entrepreneurs.
Overall, the bank’s foundation supported 45,000 individuals over the awards period, with plans to extend this to 200,000 people over the next three years.
It awarded over 6,400 scholarships in Portugal through its 22 scholarship programmes designed to enhance the skills relevant for the professional and personal development of university students. Collaboration agreements with 46 Portuguese universities and institutions supported these efforts.
A notable collaboration with TUMO, the first creative technologies centre in Portugal, saw the provision of free science, technology, engineering and mathematics education to 1,500 young people in Coimbra. The bank also joined the international Code.org movement to expand programming education in Portugal. It maintained its existing partnerships with Escola 42 and the My Mentor project.
The bank also supported business founders through its entrepreneurship empowerment initiative Santander X, with 442 startups participating in events in Portugal such as the European Innovation Academy and Web Summit.
