There is a high probability of losses within Portugal’s banks this year, due do the Pandemic, the Portuguese Banking Association (APB) warns.
Fernando Faria de Oliveira, APB’s President, says the banks are being unfairly criticized. «They are doing everything in their power to help», he said in an interview with Radio Observador. In addition, the banking sector is also concerned about the impact of the crisis and is already anticipating losses. «The probability of banks turning negative already this year is high,» declared the president of APB.
«Everything indicates we will have the biggest recession probably since I’ve been alive. When there is a recession, the banking sector is deeply affected,» explained Fernando Faria de Oliveira.
«Each month in lockdown represents a huge decrease [in economic activity], and the probability that banks will return to negative results already this year is high,» stressed the APB president. «Banks will have to do everything to avoid complicated situations, but it will be very difficult,».
Faria de Oliveira explained the impact of the crisis on banks in this way: with more families and companies in difficulty, the level of default credit could increase considerably, leading to «a higher level of provisioning for banks». «What we have to admit is that banks need to manage their balance sheets very prudently,» he concluded.
Original Story: ECO News | News
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Edition: Prime Yield