Portugal's Banks Deny Cartel at Parliamentary Hearing as Mortgage Holders Watch Closely

The chief executives of four banks operating in Portugal -- BCP, Santander, BBVA and Abanca -- appeared before Parliament on Wednesday to push back against allegations that they coordinated pricing behaviour in a way that harmed customers. The hearings were called as part of a wider parliamentary inquiry into competition and pricing in the Portuguese banking sector, an area that has attracted sustained public scrutiny since interest rates began rising sharply in 2022.

BCP chief executive Miguel Maya set the tone for the banks' collective position. There was never an intention to distort competition and never any harm to customers, he told lawmakers. There was no cartel and no collusion. What critics have characterised as parallel behaviour in interest rate setting and fee structures, the bankers argued was the natural result of operating in the same regulatory and macroeconomic environment -- not evidence of coordination.

The inquiry has focused in particular on whether the major lenders moved in lockstep on the rate applied to variable-rate mortgages as the European Central Bank raised its benchmark rates from 2022 onward, and whether they were slow to pass on subsequent ECB rate cuts to borrowers. Portugal has one of the highest proportions of variable-rate mortgage holders in the eurozone, meaning shifts in bank pricing have unusually direct and visible effects on household finances.

The banks' representatives pointed to falling spreads, improved product competition and the introduction of fixed-rate and mixed-rate options as evidence of a market that has adapted. But critics in Parliament, including from the PS and Chega, questioned whether the speed of adjustment was symmetrical -- fast to rise, slow to fall -- a pattern they argued was consistent with implicit coordination even if formal communication never took place.

The Autoridade da Concorrencia, Portugal's competition regulator, has previously opened preliminary investigations into pricing practices in the sector. No formal proceedings have been announced, and the parliamentary hearings are separate from any regulatory process.

The session carried particular weight for the hundreds of thousands of Portuguese households whose monthly mortgage payments remain directly linked to Euribor rates and bank spreads. For those who moved to Portugal and took out local mortgages -- a common step for buyers using property routes to residency -- the question of whether the banking market functions competitively is not abstract. It shows up on their bank statements every month.

The hearings are expected to continue, with further appearances from banking sector representatives and potentially from competition and consumer protection authorities. Whether they produce legislative action or serve primarily as a public accountability exercise remains to be seen.