Banks are preparing to reshape Portugal’s financial sector over the coming years by reining back lending, increasing deposits, strengthening their capital ratios and cutting costs following the country’s request for an EU-led bailout. In a shrinking domestic market hit by austerity measures, deleveraging and an inevitable recession, bankers also see further consolidation as increasingly likely over the medium term.
“We expect to see an end to the expansion of the past 15 years as lending decreases and banks scale back their commercial networks,” says Nuno Amado, chief executive of Banco Santander Totta, Portugal’s third largest private sector lender. “This could eventually make room for more consolidation,” he adds.
