Press release of Banco de Portugal on the Banking Conduct Supervision Activities – 1st half of 2021

The Banco de Portugal publishes today the Banking Conduct Supervision Activities. This publication summarises the activities undertaken by the Banco de Portugal to monitor retail banking markets in the first half of 2021.

The Banco de Portugal continued to monitor the implementation of extraordinary measures adopted to support households and firms in the context of the COVID-19 pandemic. By the end of July 2021, 381,400 credit agreements benefited from support measures provided in the moratoria, covering 292,600 debtors and a total credit amount of €36,801 million. The share of loans covered by moratoria in total credit granted to private individuals was 11.3%. Agreements covered by credit moratoria decreased during the first half of the year due to the expiration of private moratoria.

In order to monitor the disclosure of information on the possibility of redeeming retirement savings plans, education savings plans and retirement/education savings plans without penalty, the Banco de Portugal carried out inspections of the 98 institutions subject to its supervision that offered these plans. To correct the instances of non-compliance detected in these inspections, the Banco de Portugal issued 286 specific orders and recommendations to 97 institutions.

By the end of July 2021, 388 complaints had been submitted to the Banco de Portugal by bank customers, pertaining mainly to the implementation of credit moratoria and other pandemic mitigation measures. During this period, five administrative offence proceedings relating to credit moratoria were initiated against five institutions following the analysis of complaints. 

The Banco de Portugal continued to prioritise the monitoring of basic bank accounts. The Banco de Portugal supervised the practices used to offer and disclose information on basic bank accounts by the 100 institutions that provided these services.

It also assessed practices with regard to consumer credit, focusing in particular on credit offered through digital channels, and practices adopted when charging interest and other fees in the case of arrears in the payment of home loans and mortgage credit. Inspections were carried out (i) to two institutions to analyse their practices when offering personal credit, credit cards, credit lines and overdraft facilities; (ii) to 80 institutions to assess their practices when offering personal credit and credit cards through digital channels; and (iii) to 99 institutions to verify their practices when charging interest and other fees in the case of arrears in the payment of home loans.

The Banco de Portugal monitored 8,207 advertising materials for banking products and services and institutional advertising, 13% more than in the second half of 2020. The increase in advertising materials released by institutions can be mainly explained by a rise in these materials in digital form, on internet sites, social media and mailings. Of the advertising materials analysed following their public disclosure, 4.6% were non-compliant. Multi-product campaigns had the highest ratio of non-compliance (21.9%).

The Banco de Portugal received 9,646 complaints by bank customers against supervised institutions relating to matters subject to its supervision. The monthly average of complaints submitted dropped by 1.9% from 2020. This reduction can be chiefly explained by the decrease in complaints related to the implementation of the credit moratoria adopted in the context of the COVID-19 pandemic; if not for these matters, the monthly average of complaints would have risen by 3.3%.

Following the inspections and analysis of complaints against supervised institutions, the Banco de Portugal issued 822 specific orders and recommendations to 117 institutions and initiated 57 administrative offence proceedings against 23 institutions.

The Banco de Portugal approved 220 applications for authorisation to pursue the activity of credit intermediary. By the end of the first half of 2021, 5,257 credit intermediaries were registered, 3.5% more than at the end of 2020. In the supervision of credit intermediation, the Banco de Portugal inspected 40 advertising materials, which led to 14 administrative offence proceedings. In addition, it inspected 43 institutions, following which it issued 135 specific orders to 43 credit intermediaries. The Bank analysed 48 complaints by bank customers and, consequently, initiated four administrative offence proceedings and issued one specific order. During this period, six administrative offence proceedings were also initiated due to failure to comply with the rules on registration amendments.