Markets, Business & Tech Briefing: Bank Profits Dip, BCP Gains, Tekever Targets €5.5bn

Weekend Wrap: A Flat Friday That Still Closed the Week Ahead

Lisbon's exchange is dark for the weekend, so this is a weekend edition keyed off Friday's close. It was a fittingly quiet sign-off: the PSI index (Portuguese Stock Index) finished Friday, 14 August, at 9,254.52 points, statistically flat, as a firm session for the oil major Galp Energia cancelled out losses across the EDP family and left the broad tape unmoved by a fresh bout of geopolitical nerves in Europe. Yet for all the day-to-day dullness, the index still ended the week up around 1%, keeping a 2026 advance that runs to roughly 10% intact — a reminder that Lisbon has been one of the steadier performers among Europe's smaller markets this year. As so often lately, though, the more consequential news sat away from the trading screen: a health check on the banks that have powered the market's rally, a fresh nine-figure fundraising for the country's most valuable startup, and an overseas tax fight that lands one of the PSI's heavyweights in an international arbitration court.

Banks: Record-Adjacent Profits Slip From Their Peak — and BCP Alone Climbs

The banking sector that has done so much of the heavy lifting for the PSI got its mid-year scorecard this week, and the headline was a first, gentle step down from the peak. In a review published by the rating agency DBRS Morningstar, Portugal's six largest lenders — Caixa Geral de Depósitos (the state-owned bank), Banco Comercial Português (BCP), Santander Totta, BPI, Novo Banco and Montepio — booked a combined €2.5 billion in net profit in the first half of 2026, down 5.2% on the same period last year. Aggregate return on equity, the key gauge of how hard shareholders' capital is working, eased to 14.8% from 16.7% a year earlier — still a rich number by European standards, but no longer setting records.

The retreat is less alarming than it first looks. Lending grew about 9% and fee income rose 5.3%, with the cost of bad loans hovering near zero; the main drags were softer trading gains, costs up 4.8%, and the absence of a one-off boost the sector enjoyed in 2025, when a Tribunal Constitucional (Constitutional Court) ruling reversed an earlier tax charge and flattered the comparison. The cost-to-income ratio, a measure of efficiency, held steady at a lean 37%. The standout was BCP, the only one of the six to grow its profit — up 12.7% — helped by a stronger domestic business and lighter provisions on the Swiss-franc mortgages at its Polish arm, Bank Millennium. For investors, the message is that Portugal's banks are past the easy, rate-driven windfall of the last two years and now have to grind out growth the harder way; that they are still earning double-digit returns while doing so is why the sector remains the market's ballast rather than its worry.

Tech: Tekever Opens a €500 Million Round at a €5.5 Billion Price Tag

The week's standout technology story belongs to Tekever, the Lisbon-founded maker of military and surveillance drones that has become Portugal's most valuable startup. The company has opened a fresh funding round of around €500 million that would value it at €5.5 billion, capital it intends to pour into continued expansion after a run of European defence contracts and a string of bolt-on acquisitions of smaller startups. The investors behind the round have not been named.

The scale of the ask is the story. A €5.5 billion price tag places Tekever comfortably in the top rank of European defence-technology firms and is a striking marker for a company that, only a few years ago, was a niche unmanned-systems specialist. Its rise has ridden the same wave lifting the whole sector — a Europe rearming in earnest, and buyers who now prize the cheap, attritable reconnaissance drones that have defined the war in Ukraine. For Portugal, whose listed market is short on technology names, Tekever is fast becoming the flag-bearer for a homegrown industry that answers to defence ministries rather than consumers — and a reminder that some of the country's most valuable businesses never touch the Lisbon exchange at all.

Galp: A €760 Million Mozambique Deal Heads to International Arbitration

Friday's best blue chip also carried the week's thorniest legal news. Galp Energia has escalated a tax dispute with Mozambique into international arbitration, filing a case at the ICSID (International Centre for Settlement of Investment Disputes), the World Bank's investment tribunal, and invoking the bilateral investment treaties Portugal signed with Mozambique in 1995 and the Netherlands in 2001 to shield the deal. At the heart of the fight is Galp's sale of its 10% stake in Area 4 of the Rovuma Basin — Mozambique's vast offshore gas province — to the Abu Dhabi National Oil Company (ADNOC), a transaction worth at least €760 million. Mozambique's tax authority is demanding roughly US$175.9 million on the sale; Galp, whose case was registered in late June, disputes the bill.

The clash is a case study in the risks that come with Galp's most promising long-term bet. The Rovuma gas is a cornerstone of the company's future beyond oil, but Mozambique is a jurisdiction where security, politics and now taxation have repeatedly complicated the economics. Taking the government to a World Bank tribunal is a firm signal that Galp will defend the terms on which it monetises those assets — and a reminder to shareholders that the group's growth story runs through some of the trickier corners of the energy world. The dispute is unlikely to move the shares on its own, but it is one to file under the slow-burning risks worth watching.

Markets, Bonds and the Euro: Friday's Tape in Numbers

Beneath the flat headline, Friday's session had its usual push and pull. Galp led the blue chips, climbing 1.71% to €20.81 as a firmer oil price — Brent crude traded in the high-$80s, up around 1.7% on the day — burnished the sector; the telecoms group NOS added 1.00% to €4.848, the paper-and-pulp holding Semapa rose 0.50% and the retail-to-telecoms conglomerate Sonae edged up 0.25%. On the other side of the ledger, the renewables developer EDP Renováveis (EDP Renewables) fell 1.81% to €13.59 and dragged its parent EDP down 0.22% to €4.545, while the postal operator CTT slipped 0.55%. Seven of the sixteen index members rose — just enough, with Galp's weight, to hold the line at the water's edge.

In the bond market, Portugal's 10-year Obrigações do Tesouro (Treasury bonds) ended the week yielding around 3.55%, up about six basis points on Friday in step with a broader eurozone drift higher. That still leaves the spread Lisbon pays over the benchmark German Bund in the mid-30-basis-point range — a historically slim premium that continues to reward the country's run of budget surpluses and falling debt. The euro, meanwhile, stayed firm: EUR/USD traded near $1.157, close to a two-month high, as the dollar softened ahead of the next round of United States data. A stronger single currency eases Portugal's imported-fuel bill but nibbles at the competitiveness of its exporters and its dollar-earning tourism trade.

The Week Ahead

Lisbon reopens on Monday, 17 August, to a thin domestic calendar with earnings season behind it, so the initiative passes once more to events abroad. The direction of crude will decide whether Galp can extend Friday's lead, while United States data will keep steering both the euro and the bond market — and with them Portugal's rate-sensitive banks and utilities. Closer to home, the threads to watch are the ones that ran off-screen this week: whether Tekever's giant fundraising firms up with named backers, and how quickly the government moves toward its promised September decision on the TAP privatisation. After a week that gave little away by the day but still finished ahead, August's real story remains one of deals and balance sheets rather than the trading floor.