ACRAL, the Algarve retailers’ association, says it is “surprised and worried” by how much money is being lent to consumers while company loans are falling. Its president has even slammed state-owned bank Caixa Geral de Depósitos (CGD) for not setting the example and “following the same tendencies” as other private banks.
In a statement sent to newspapers, the association warns that consumer credit and home loans have increased 52% and 25% between January and May 2015, reaching the highest levels (€1.22 billion and €1.29 billion) since the height of the crisis in 2011.
On the other hand, it says business loans fell 30% according to data from the Bank of Portugal.
“This is a bad sign. We are making the same mistakes of the past,” warned ACRAL’s president Victor Guerreiro, claiming there is no point lending money to people if companies are left struggling.
“Banks won’t get the money they are lending back without giving companies the conditions they need to develop their activity and create jobs and wealth,” he explained.
According to Guerreiro, if people “don’t have jobs, or have unstable ones,” they won’t be able to pay back the money banks have lent them.
He also criticised state-owned bank CGD, which he says should be setting the example, not “following the same tendencies” as other banks.
“What’s the point of having a public bank when it acts the same way, or even worse, than private commercial banks,” he asked.
While Guerreiro said he agreed that there are “many positive signs in Portugal’s economy”, he stresses that companies still lack support and that banks – especially CGD – should have strategies that are more “focused on the economy and supporting companies”.
In May, consumer watchdog DECO sounded a similar alarm, warning that debt levels were rising to the point at which they were at the peak of the crisis.
