Portugal: 60% of banks controlled by foreign capital

Banks controlled by foreign investors or in which their capital is preponderant represent more than 60% of the Portuguese banking system, both in terms of assets and liabilities, according to calculations made by Lusa using data from the APB,  These figures were based on the latest bank balance sheets available on the website of the Portuguese Banking Association (APB), for June 2024.

According to Lusa’s calculations, banks owned or controlled by foreign capital (including BCP, Santander Totta, Novo Banco, BPI but also Bankinter and Abanca) represent more than 60% of the banking system’s total assets and liabilities.

Banks’ assets include loans and advances to customers (the main item), but also investments in other banks and financial instruments such as shares and bonds. Bank liabilities, on the other hand, include banks’ responsibilities towards third parties, including deposits.

These figures indicate that foreign capital has increased in the Portuguese banking system in almost 10 years, as in 2016 foreign-owned banks accounted for around 50% of the banking system (down from around 60% today).

Currently, the main banks operating in Portugal are Caixa Geral de Depósitos (fully owned by the Portuguese state), BCP (the main shareholders are China’s Fosun and Angola’s Sonangol), Santander Totta (owned by Spanish group Santander), Novo Banco (75% owned by US fund Lone Star) and BPI (owned by Spanish group Caixabank).

The medium-sized banks include the Portuguese Crédito Agrícola and Montepio and then the Spanish Bankinter and Eurobic Abanca (a transitional brand after the Spanish group Abanca bought Eurobic).

Caixabank’s takeover of BPI (in 2017, as part of the takeover bid), the integration of part of Banif’s operation (in its resolution) into Santander Totta, and Bankinter’s strong entry into the Portuguese market (in 2016, it bought part of Barclays’ business) and Abanca’s strong entry into the market (in 2018, the group owned by billionaire Juan Carlos Escotet bought Deutsche Bank’s retail business and completed the acquisition of EuroBic in 2024) contributed to this.

Spain has traditionally dominated Portuguese banking, but its influence has increased in the last decade. In June 2024, banks with Spanish capital accounted for almost 30% of the total. Caixabank’s takeover of BPI (in 2017, as part of the takeover bid), the integration of part of Banif’s operation (in its resolution) into Santander Totta, and Bankinter’s strong entry into the Portuguese market (in 2016, it bought part of Barclays’ business) and Abanca’s strong entry into the market (in 2018, the group owned by billionaire Juan Carlos Escotet bought Deutsche Bank’s retail business and completed the acquisition of EuroBic in 2024) contributed to this.

On the other hand, Angolan capital in Portuguese banking was reduced, mainly due to the divestment of businesswoman Isabel dos Santos (daughter of former Angolan president José Eduardo dos Santos), who is involved in several legal cases.

The Santoro holding company (owned by Isabel dos Santos) left BPI in 2017 during the Caixabank takeover bid and, last year, the sale of Eurobic (a bank controlled by Isabel dos Santos) to Abanca was completed.

In recent years, Angolan oil company Sonangol has maintained its stake in BCP, making it the second-largest shareholder (with 19.49% of the share capital).

As for Chinese investors in Portuguese banking, almost 10 years ago they took advantage of discount prices as an opportunity to enter Europe and have been discreet ever since.

The Chinese group Fosun joined BCP in 2016 and became the largest shareholder that year. Since then, Fosun has reduced its position but remains the main shareholder (with 20.03%). In 2015, the Haitong group bought BES Investimento, now known as Haitong Bank.

Finally, US capital is present through Novo Banco. The institution was created in 2014 by the resolution of BES and has been 75% owned since 2017 by the investment fund Lone Star. The remaining % belongs to the Portuguese state.

Lone Star wants to sell Novo Banco and is preparing to go public this year.

In any case, the sale of Novo Banco (due to its weight in the Portuguese banking system) will lead to a major change in the national banking landscape in the medium term.