Portugal’s banks are charging their customers a total of €5 million a day in account fees.In recent years, bank charges have risen steeply with a current account now costing an average of €63 per year for ‘maintenance.’
These charges are costing customers €1.8 billion-a-year, according to consumer watchdog, Deco.
Bank commissions accounted for 35% of the sector’s revenues in the first half of last year; a year earlier it was 34% - and 31% in 2010.
The worst offender is State-owned bank, Caixa Geral de Depósitos, which again has revised its prices, as from March 2018.
"The trend has been a general increase in commissions in Portuguese banking, above the increase in inflation, a benchmark commonly used by banks to justify these price hikes," said Nuno Rico, an economist with Deco.
In the last twelve months, banking commissions charged by the top five (BCP, BPI, CGD, Novo Banco and Santander Totta), have risen 6% - inflation over the same period was just 1.4%.
"Account maintenance charges have increased 45% in the last ten years," with fewer able to qualify for free banking due to tighter criteria, says Rico.
Caixa Geral de Depósitos is led by Paulo Macedo who said in May 2017, that commissions would have to increase by €100 million over four years and has taken full advantage of his own advice by leading the advance.
Deco says that avoiding Caixa Geral account maintenance commissions is now an almost impossible task, except for pensioners who receive less than €870-a-month and single account holders under 25-years-old.
Other CGD customers now pay €61.80 per year - unless they use credit and debit cards at least once every three months. Having these cards cost an annual fee with basic interbank transfers also charged for.
Caixa Geral’s Macedo said he wants to compensate taxpayers for the money they injected, adding that "there is still much to do" to improve the profitability of the State-owned bank.
After making a profit of €51.9 million, the first positive result after six years of losses, the bank's chief executive said that "in terms of profitability there is a lot to do," as his assault on his own customers continues.
"Caixa has to have the ambition to pay the cost of capital and to return money to the taxpayers ... that can compensate the taxpayers for the money they put in this institution," said Paulo Macedo, seemingly oblivious to this Mad Hatter’s approach to modern banking: rip-off the bank’s account holders so as to return the money to taxpayers – many of whom are account holders.
What Macedo really wants is to show a set of profits, largely funded by hapless domestic account holders, as a precursor to floating the bank on the stock market.
The Left Bloc wants the finance minister to halt these ‘abusive increases’ at the State.owned bank and the CGTP union, "considers it unacceptable that the State-owned bank continues to hike costs, charging even higher fees than private banks."
Portugal’s president, Marcelo Rebelo de Sousa, made the unhelpful comment that Caixa Geral’s recovery "requires sacrifices" and these charges "are generally justified."
Deco concentrates on the big, bad banks but omits to mention that there are six banks in Portugal that, as yet, do not charge account maintenance fees: Activo Bank, Banco Atlântico Europa, Banco BNI Europa, Banco CTT, Best Bank and BIG.
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