Business in Angola contributes to profitability of Portuguese banking sector

7 April 2010

Lisbon, Portugal, 7 April – Portugal’s main banks will be able to maintain their levels of profitability in 2009 due to a rise in spreads and of foreign operation, particularly in Angola, the Fitch agency said Tuesday.

The international rating agency said that in 2010 the financial margins of the biggest Portuguese banks, Caixa Geral de Depósitos, Millennium bcp, Banco Espírito Santo (BES), Santander Totta and BPI – will remain relatively stable in 2010 compared to 2009, despite the weak macroeconomic climate in Portugal and higher financial costs.

However, the agency warned that any adverse reaction to capital markets that reflects the Portuguese government’s fiscal position could further increase the costs of financing for Portuguese banks and make access to funds by the capital markets more difficult.

In March Fitch lowered its medium-long term rating on the Portuguese Republic to “AA-“ and last week lowered its rating on Millennium bcp and BES to “negative,” whilst keeping its rating on the two banks’ debt unchanged.

Fitch also noted that Portuguese banks had once again proved that Portuguese banks had proved to be more resistent to the crisis than many of their international peers, citing teh cases of BES, BPI and Santander, which increased their profits.

CGD, BCP, BES and BPI have a rating of “A+” with a negative outlook, whilst Santander Totta has a rating of “AA”, with a stable outlook. (macauhub)