In today’s trial session, which is expected to be the last before sentencing, prosecutor Paulo Vieira highlighted the “important role of banking in the economy” and how “economic activity is based on trust relationships” to express hope that this process will contribute to families and businesses having more confidence in the banking sector.
“We hope that this process will contribute to strengthening the reputation of the banking sector as a whole, through the public visibility of its past conduct, the fundamental role of regulatory intervention and the judicial system, and the corrective measures implemented in the meantime,” he said.
The Public Prosecutor’s Office also considered that this process demonstrated that information sharing between banks had effects on the market “with customers being harmed” by paying higher credit prices. At the same time, information sharing allowed banks to “give credit with greater security” by knowing the competitive position of their competitors.
The prosecutor also said that there are banks that “continue, against the evidence, to deny the motivation and hierarchical knowledge of these practices” and alluded to the “excellent results” of banks, especially in 2023, to consider that this could “in abstract lead to considering an increase in fines because a large part of these profits are directly related to mortgage loans,” a credit segment targeted by the practices for which banks were sanctioned by the Competition Authority.
The Public Prosecutor’s Office also spoke about bank fees, considering that following the “substantial” rise in interest rates, a decrease in fees charged by banks was expected, but this did not happen. From the existing information, the only bank that marginally reduced fees was Caixa Geral de Depósitos (CGD).
“And this says everything about this sector. It is a sector that has a special and acute need for intervention regarding these matters, to become more competitive,” he stated.
At the end of his intervention, the Public Prosecutor’s Office expressed its opinion on the fines applied by the Competition Authority in 2019, considering them generally adequate, even taking into account the banks’ results in 2023.
Paulo Vieira specifically referred to BCP’s situation, stating that in the 2022 allegations, he argued that the fine should not affect its financial soundness (at a time of post-pandemic recovery and when the bank had problems with its operation in Poland), but today, given last year’s results, “that situation is perfectly faded.”
Thus, he considered the fines for CGD (82 million euros), BCP (60 million euros), and Santander Totta (35.6 million euros) appropriate and to be maintained. Regarding BPI, he considered the fine (30 million euros) adequate but admitted a “marginal reduction” given the bank’s stance in the process and assumption of responsibilities.
He also considered the fines for BBVA (2.5 million euros), Caixa Central de Crédito Agrícola (350,000 euros), and UCI (150,000 euros) appropriate. For BIC’s fine (500,000 euros), he admitted a “marginal reduction.”
For Montepio bank, considering it is an entity with a social and mutualist component, its stance in the process, and its “somewhat weak” situation, he suggested a maximum fine of 4.8 million euros.
For BES, he advocated a “merely symbolic” fine, given that it is in liquidation.
Barclays, as it was the one that disclosed the information concertation and requested leniency, should be exempted from any fine.
Since October 2021, the Competition Court has been hearing the appeal of 11 banks fined in 2019 by the Competition Authority (AdC) for the concerted practice of exchanging sensitive information on credit.
According to the regulator, between 2002 and 2013, more than 10 banks shared information among themselves, including tables of interest rates and spreads (commercial profit margin) to be applied to customer loans (housing, consumer, and business) and production volumes, fining them a total of 225 million euros.
In April 2022, Judge Mariana Gomes Machado gave facts as proven but, at the same time, decided to suspend the instance and refer to the Court of Justice of the European Union (CJEU) for it to rule on whether the facts constituted a restriction of competition by object, as it had not been proven whether the exchange of information had an effect on consumers or not.
In July this year, the European court admitted that the exchange of information maintained by banks for more than a decade “may constitute a restriction of competition
