BANKS OPERATING in Portugal are earning a staggering 6.6 million euros a day according to the Portuguese Banking Association (APB).
In the first 181 days of 2006, net profits from all of the banks combined had risen 1.2 million euros from interest on mortgages, loans and service charges.
The statistics, furnished by the APB, headed by João Salgueiro, show that back profits shot up by 29.6 per cent on the same period in 2005, when profits for the first six months were 925 million euros or 5.1 million euros a day.
When it came to interest rates on loans alone, financial institutions earned 8.2 billion euros for the period. The APB says that the higher cost of lending strongly contributed to the increase in banking sector results.
The trend of soaring profits is set to continue for the second half of 2006, if interest rate hikes, ordered by the European Central Bank, are taken into account. At present they are 3.5 per cent.
With regards to bank commissions on services, the Portuguese banking sector netted an incredible 946 million euros, around 12 per cent more than the same period in the first half of 2005.
On the foreign exchange, derivatives and capital markets results soared by a staggering 26.4 per cent to 1.04 billion euros for the period.
On the expense side, personnel costs went up slightly above the 17 per cent registered last year, to 1.3 billion euros, an increase associated with the greater number of employees in the sector.
The sector directly contracted around 3,000 people for the period, many of them by integrating staff within the banking sector, who previously had been working for outsourced companies.
The increase in staff translated into an average of 11 additional workers for each bank branch. The banking sector in Portugal currently employs 50,000.
However, the overall number of branches was reduced by 56 in the first half of 2006, leaving a total of 4,724 branches nationwide.
High bank profits have recently generated criticism in the national press and from other quarters.
The former European parliament deputy, Helena Torres Marques, asked how it was possible that the Portuguese economy, which was growing so little economically (around one per cent) could have a banking sector with such phenomenal growth, while both financial experts and economists have criticised the banks for charging such high commissions.