Missing the point completely, the Ministry of Finance says that Caixa Geral's account fees are "in line" with competitors and that “price convergence is important to ensure the viability of the public bank.”The public contend that all the banks have put their charges up in tandem to fill the profit gap left by operating inefficient and overstaffed operations that have failed to adjust to a new reality.
The Ministry of Finance was giving answers to questions from Left Bloc and Social Democratic Party MPs who questioned the bank about Caixa Geral cancelling free accounts for its younger customers.
In the written replies, the answer was that, "the government entrusted the bank's management with the task of ensuring the institution's long-term financial soundness" and that in order to fulfil this mission, Caixa Geral has ‘converged’ its charges with the market.
Finance Minister, Mário Centeno, considers that "Caixa’s account fees are in line with competitors in the market" and adds that the bank "maintains a wide range of exemptions for customers according to their particular status.”
The ‘bank charges’ row is focusing on Caixa Geral as it is owned by the public, many of whose members want it to keep unprofitable branches open, especially in rural areas, and to have loss-making, zero charge account for low-income customers.
The government has charged Caixa Geral’s directorate with preparing the bank for sale, one way of recouping the billions thrown into its rotting carcass when it was run as a directors’ playground with loans to mates, no collateral needed and don’t hurry to pay anything back.
All Portugal's high street banks have raised their charges as interest rates are low and they have been slow to adjust from a ‘high street’ banking business model.
Prime Minister, António Costa, has made it clear that the State, despite holding the majority of CGD's shares, will not interfere with Caixa Geral’s management.
The President of the Republic, Marcelo Rebelo de Sousa, has said that the recovery of Caixa Geral "requires sacrifices that are generally justified."
Caixa Geral's boss, Paulo Macedo, said that 1.3 million retirees and young people, 1.2 million other qualifying account holders and 800,000 'zero balance' customers all had free banking, a situation that could not continue.
In 2017, Portugal’s top five banks (CGD, BCP, Santander Totta, BPI and Montepio) earned €1.877 billion in fees from customers - €102 million more than the year before.
In 2017, Caixa Geral charged €465 million in commissions, €15 million more than in 2016.
Caixa Geral’s Macedo is expected to be heard in parliament in next few days to explain increased bank fees and Caixa Geral's restructuring plan, after a request from the Left Bloc was unanimously approved by the Budget and Finance Committee.
There are six banks in Portugal that, as yet, do not charge account maintenance fees: Activo Bank, Banco Atlântico Europa, Banco BNI Europa, Banco CTT, Best Bank and BIG.
The adage, "never gove something away for free that you want to charge for later," holds true as this row continues.
