Banco CTT will have “low costs” on housing credit

  • ECO News
  • 31 October 2016

Francisco Lacerda, chairman and CEO of CTT (Postal Services of Portugal), says everything is almost ready to start operating housing credit and promises a “simple and low costing” product.

The CTT has shown plunging results, but the dividends are assured. Banco CTT (CTT’s Bank) is to blame, since it will continue to weigh in on the balance, at the same time it continues to offer more services: after deposits and consumer credit, housing credit will come in the beginning of 2017 at “low costs”, says Francisco Lacerda. It will allow for an increase in the number of clients, but the bank is also mindful of the opportunity to buy assets associated with clients. Below are the transcript excerpts of the interview made by ECO.

The CTT have presented lower net results, also because of Banco CTT. Until when will it negatively affect the balance? Expectation is for Banco CTT to break-even at the turn of 2017 to 2018. We would not like to say anything different. In terms of liquidity, there is a gap. Can investors feel confident with the dividends?

Yes, yes. And more specifically concerning the upcoming dividends, we can say we are confident in bringing forward – because it is not the right time to formally make a decision – a dividend of 48 cents per asset which is a 2% increase compared to the 47 cents paid concerning 2015.

About financial products, do you fear a negative impact on the end of premiums in savings certificates?

That is something we have not been able to properly clarify. 2016 is being as much of a strong year [for subscribing certificates] as 2015. What we see from the interest population and clients have on Portuguese public debt products and, for example, these bonds placed at bank counters, they have not made the search for CTT’s counter certificates decrease. There is a permanent, and perhaps growing, interest in continuing to place a percentage, possibly increasing, of public debt among the national retail. In other words, it happens regardless of whether the product reached the end of the series or not… the general tendency will be a strong tendency in the market.

Do you believe the CTT will continue to commercialize IGCP’s products?

Contracts come to an end, from time to time. And they must be renewed. But we have been selling certificates for 50 years. We see no reason to stop. I believe the IGCP [Portuguese Public Debt Management Institute] feels the same way.

With the CTT selling certificates, will Banco CTT be able to sell OTRV [sovereign bonds sold to retail investors – Obrigações do Tesouro de Rendimento Variável]?

Who’s to know? Maybe in the future. In the Banco CTT we do not place any product in the capitals’ market. We are not doing so today. We will not do it for the near future, but maybe later, who knows? It would be another product to join the interesting ones we own.

CTT already has deposits and consumer credit. When will the housing credit begin taking place?

We always said it would happen at the turn of 2016 to 2017. It is more likely to happen in 2017 since the last month of this year is not the best to launch these types of products, but everything is being finalized.

Will you be competitive? Will you have low spreads?

The bank generally aims to be positioned as a bank with simple products and with low costs. But that does not mean being overly aggressive in any product. Concerning housing credit, it is still too early to be specific, but it will obviously remain within this general scenario.