President of Santander says that the Portuguese “continue with a high consumption pattern, dining out on Fridays” – Observer
Santander Portugal ended the 2022 financial year with results of 568.5 million euros, announced the bank this Thursday at a press conference at its headquarters in Lisbon. This is the recurring result, which excludes an accounting gain from the sale of a unit to another area of the group, which is why the bank does not include it in the recurring result.
“These are very good results, which we are proud of”, said Pedro Castro e Almeida, the president of the executive committee. Results nearly doubled from the previous year’s roughly $298 million.
The official said, regarding the interest rate hikes, that the bank examined “all” customers with mortgage loans – between 260 and 265 thousand customers – and “a few thousand are at risk of default“.
“At Santander we do not see any relevant change in default on mortgage loans”, said the official.
There is a huge asymmetry between what is said by a consumer protection association, which talks about one or another case, and the reality we see in banks”, says Pedro Castro e Almeida.
The president of Santander Portugal stressed that, in a “full employment” economy, “see many people out to dinner on friday night“.
“The level of consumption, in macroeconomic terms, is at very high levels and we are at full employment. As long as we are at full employment, we are not going to have a very complicated situation”, said the president of Santander.
The president of Santander Portugal also spoke about what he says is a “communication dissonance” on the issue of marking customers. “What Banco de Portugal came to say is that there is no marking in the Credit Responsibility Center, and that is true”, says Pedro Castro e Almeida.
But “Banks, as required by the EBA and the ECB, are obliged for prudential reasons to register in their systems all customers with restructured credits with anxieties of difficulties“.
“When granting new credit, it is naturally important for the bank itself to know whether the customer has had financial difficulties”, explained Pedro Castro e Almeida.
Banks “mark” customers if they have “financial difficulties” and renegotiate the
In a press conference, Pedro Castro e Almeida underlined the need for the Government to maintain budgetary consolidation as a priority to avoid the risk that Portugal finds itself in difficulties if the instability in the debt markets increases and there is again an expansion of the debt risk premiums , as happened in 2010 and 2011.
The banker also praised exporting companies and warned that the increased weight of consumption in the Portuguese economy “is not sustainable”.
Looking to 2023, Pedro Castro e Almeida mentioned as a risk that the possibility of remaining high, especially coexisting (which excludes energy prices). Another risk is a larger-than-expected rise in interest rates. “I would not underestimate the risk of rates going between 3.5% and 4%, the market is not discounting this situation and it would be a big difference, for banks and for families”.
However, “the variable we have to pay more attention to is unemployment”. “Unemployment below 8% is one thing, unemployment above 8% is something else”, said Pedro Castro e Almeida, who also spoke of the risk of “not executing the PRR in an effective way”, which could be “a missed window of opportunity”.
In addition, the banker criticized the excessive bureaucracy in the Portuguese economy and the fact that, “in Portugal, it is a crime to create wealth”. “We are discussing generalities every day but we must not continue like this in the next three years”, he shot.