Spanish banks resist falling interest rates with profits of €1.8 billion in Portugal
Santander, BPI, Bankinter and Abanca: the Spanish armada in Portuguese banking resisted the fall in interest rates and saw profits stabilise at €1.8 billion.
Despite the fall in interest rates affecting financial margins last year, Spanish banks saw their profits stabilise at €1.8 billion in Portugal. As is well known, €1.3 billion in dividends will go to Madrid.
Santander Portugal was the most profitable: on Thursday, it reported net profits of €963.8 million, representing almost half of the total profits of the four banks owned by the neighbouring country operating in the domestic market.
The bank, which is preparing to have a woman at the helm, with Isabel Guerreiro replacing Pedro Castro e Almeida as CEO from 1 March, stabilised its profits, even though its financial margin slipped by 12.5%. Several items helped to offset this decline, including commissions, results from financial operations and the recovery of the solidarity surcharge that the court deemed unconstitutional.
As a result, the former Totta closed 2025 with a return on equity of over 30%. “We are the most profitable bank in Portugal and one of the most profitable in Europe”, said Pedro Castro e Almeida. This is the legacy he will leave to his successor.
As for BPI, owned by Caixabank, performance was different. Profits fell by almost 13% to €512 million last year. This decline in net income is mainly explained by a drop of more than 10% in the financial margin. However, CEO João Pedro Oliveira e Costa believes that the situation has stabilised and that the bank should maintain these margin levels. “We are already seeing a levelling off in the fall in rates. I believe we will stay where we are now”, he said.
€1.3 billion in dividends for Madrid
The two banks have already revealed what they intend to pay in dividends to their owners. In the case of Santander Totta, the cheque will correspond to 90% of the result, i.e. a sum of around €867 million. At BPI, the formula includes 75% of domestic results and 100% of results in Mozambique and Angola, with Oliveira e Costa estimating a figure of around €428 million.
The “Spanish armada” in the national banking sector also has two other players of more modest size, although they are growing. Abanca, which has just completed the acquisition of Eurobic, announced profits of €103 million in its Portuguese operations, up 10% year-on-year. The margin shot up 20%. Bankinter, which bought Barclays’ business in 2016, posted pre-tax profits of €210 million, although its margin declined slightly.
Both Abanca and Bankinter executives are satisfied with the dynamics of domestic operations and reaffirm that Portugal is one of the main markets for their operations.
Credit soars to €107 billion
Another factor that helped cushion the impact of falling rates was the increase in credit volume. In aggregate terms, the loan portfolios of Santander, BPI, Bankinter and Abanca total €107 billion in Portugal, up 7.2% from the end of 2024. This means that Spanish banks have a market share of around 49% in the national system.
Part of the success in lending has been due to the public guarantee for young people, which is driving demand in the housing segment among all banks, Spanish and otherwise.
As for deposits, the four institutions hold more than €90 billion in savings from Portuguese households and companies, which corresponds to a third of the market.
In the coming weeks, the other major banks will also present their accounts for 2025. Caixa and BCP will do so in the last week of the month. Novobanco — which will have a French owner, Groupe BPCE — will only present its results in early March.
