BPI's João Pedro Oliveira e Costa Tells the Bank of Portugal His Youth-Credit Book Is Clean — Lisbon Lender Books €133 Million Q1 Profit, -2% Year-on-Year, as the Supervisor Prepares Tighter Mortgage Rules

BPI's chief executive João Pedro Oliveira e Costa pushed back today on the Bank of Portugal's emerging concerns over the publicly-guaranteed youth-credit programme, telling reporters in Lisbon that the bank sees "nenhum nível de preocupação" on its book and observes "no differences" between the public-guarantee mortgages and standard mortgage lending in other segments. The CEO also confirmed BPI will comply with whatever macroprudential measures the supervisor introduces, calling them "reasonable and legitimate" given the recent growth in housing credit.

The line from BPI lands as the Banco de Portugal prepares a tightening of the mortgage-disbursement framework. The supervisor has flagged deteriorating risk indicators inside the public-guarantee programme — the politically high-profile youth scheme rolled out under the Montenegro government to help first-time buyers under 35 onto the property ladder — and is expected to introduce stricter loan-to-value, debt-service-to-income or stress-test requirements over the coming months.

Q1 2026: €133 Million in Net Profit, Down 2 Percent Year-on-Year

Alongside the regulatory commentary, BPI booked first-quarter results that fit the broader Portuguese banking pattern reported over the past fortnight. Net profit landed at €133 million for Q1 2026, a 2 percent decline year-on-year. The print is in the same direction as Caixa Económica Montepio's Q1 reading published earlier today — a 31 percent fall to €23.6 million on a credit-impairment reversal base effect — and reflects a sector-wide normalisation as the Euribor-driven net-interest-income tailwind of 2024-2025 fades and impairment write-backs taper.

BPI's drop is the milder of the two. The bank has historically run a more diversified mix between mortgages, corporate lending and asset management than Montepio, and Oliveira e Costa's commentary today suggests the youth-credit book is contributing more growth than it is dragging on impairments — at least at the granular level the bank reports internally.

Why the Bank of Portugal Is Tightening

The supervisor's concerns are not about isolated default cases — they are about the trajectory of risk indicators. The youth-credit programme launched with strong political momentum and significant volumes, and the BdP has a duty to look through the public guarantee at the underlying exposure. Two specific issues have been flagged in supervisory commentary in recent weeks:

• Affordability creep: rising property prices in Lisbon, Porto and the Algarve mean an increasing share of approved youth-credit applications sit at the upper bound of the programme's debt-to-income ratios.
• Concentration in higher-risk categories: the supervisor has noted that the programme has been used disproportionately for higher-LTV transactions, with thinner equity buffers than standard mortgage origination.

The macroprudential lever the BdP can pull most directly is the existing recommendation framework on LTV, DSTI and maturity caps. The supervisor has indicated it is preparing to revise these — either to tighten the parameters that already apply, or to introduce specific carve-outs for the publicly-guaranteed segment that would prevent the public guarantee being read as a licence to push above the conventional risk envelope.

What BPI's Stance Tells You About the Industry Position

Oliveira e Costa's framing matters because BPI is one of the largest writers of publicly-guaranteed youth credit in the Portuguese market. Saying the programme is "clean" at the bank level — and simultaneously committing to comply with whatever the supervisor introduces — is the precise position the industry has been coordinating around: defend the underwriting record, accept the regulatory tightening as legitimate, and contest only the most aggressive parameter changes through the consultation phase.

The political tension is harder to manage. The youth-credit programme has been one of the Montenegro government's flagship housing-policy answers to the affordability crisis. A high-profile macroprudential tightening from the central bank — which is institutionally separate from the executive — would, in practice, slow the volume of youth purchases through the second half of 2026, just as the government is trying to demonstrate that its housing measures are delivering.

For first-time buyers in the 25-35 age bracket who have not yet completed an application, the practical implication of today's BPI commentary is to expect tighter approval criteria in the second half — and to act on existing pre-approvals before the new rules take effect.