Banking Executives Defend Collusion Findings at Portugal Parliament Hearing

The Portugal Parliament has completed a series of confrontational hearings with banking executives over the country's information-sharing scandal, a case that saw €225M in penalties annulled on procedural grounds but left civil compensation claims pending through class actions.

Four major financial institutions—Santander, BCP, BBVA, and Abanca—faced pointed questioning from the Budget, Finance, and Public Administration Committee over their roles in exchanging confidential commercial data on loan pricing between 2002 and 2013. Despite a Competition Court ruling that confirmed collusion, every bank maintained the same defense: customers were never harmed, and in fact may have benefited.

Why This Matters

• Annulled penalties, ongoing scrutiny: All €225M in regulatory fines were annulled in February 2025 due to statute-of-limitations issues, but the underlying infractions were legally confirmed.

• Class actions remain pending: Parliament heard that civil lawsuits are in progress and could result in significant financial consequences for banks if successful.

• Future cases protected: A 2022 reform to Portugal's Competition Law now suspends prescription during appeals, preventing similar procedural escapes in ongoing or future enforcement actions.

The Unified Defense Strategy

Isabel Guerreiro, who assumed leadership of Santander Totta this week, told lawmakers she regrets the case was not fully litigated to the end. "It would have confirmed there were no anti-competitive practices and that customers were never harmed," she said. Guerreiro acknowledged that internal staff now face strict prohibitions on informal contact with rival institutions and undergo mandatory compliance training.

Miguel Maya, head of the executive committee at Banco Comercial Português (BCP), went further, insisting the exchange of pricing tables—shared late on Fridays for Monday implementation—left no time for competitive adjustment. "No one reacts to this. A bank is not going to spend the weekend making corrections," he argued. Maya cited an EU legal opinion to claim the case was never a true cartel under competition jurisprudence, despite the trial court explicitly using the term conluio (collusion) in its verdict.

At BBVA, executive Luís Castro e Almeida dismissed the severity of the data-sharing, noting that similar information is now routinely provided by the Banco de Portugal and accessible via smartphone apps. "If that was sensitive, then what we have today is secret," he remarked, adding that BBVA once offered mortgage spreads as low as 0.25%—a record he framed as proof of hyper-competition rather than coordination.

Abanca's Pedro Pimenta invoked a 2008-2010 partnership with consumer advocacy group Deco, under which the bank guaranteed to beat competitors' mortgage rates. He claimed 80% of Abanca's home loans in that period flowed through the program, effectively immunizing the institution from anti-competitive behavior.

What the Competition Authority Actually Found

The Portugal Competition Authority (AdC) concluded that 11 financial institutions shared advance pricing on loan spreads—the profit margin added to the Euribor benchmark—as well as monthly credit volume data. The exchange covered mortgages, consumer credit, and small-business financing. The court found this aligned commercial practices and distorted competition, particularly harming individual borrowers who lack negotiating leverage against corporate lenders.

Critically, the AdC noted that while the Euribor index fell sharply after mid-2008, spreads charged by banks rose steadily, offsetting what should have been lower borrowing costs for households. Barclays, which blew the whistle on the arrangement in exchange for immunity, was the only institution to demonstrate "critical awareness" of the conduct, according to the tribunal.

The Prescription Loophole and Its Closure

Despite the September 2024 confirmation of penalties by the Competition Court in Santarém, the Lisbon Court of Appeal ruled in February 2025 that the time spent awaiting decisions from European Union courts counted toward the statute of limitations. All fines were nullified. Appeals to the Portugal Constitutional Court were rejected, finalizing the outcome.

However, the AdC's president testified to Parliament in July that the infractions themselves were never absolved—only unpunishable due to timing. He emphasized that the 2022 Competition Law reform (Law 17/2022) now suspends prescription clocks during judicial appeals, ensuring that future cases cannot be dismantled by procedural delay.

The annulled penalties ranged from €82M for Caixa Geral de Depósitos down to €150,000 for UCI. Santander faced €35.65M, BCP €60M, and BPI €30M.

Parliamentary Response and Civil Litigation

Parliamentary exchanges grew heated when lawmakers discussed the potential for civil class actions to result in compensation. Socialist Party deputy Miguel Matos accused the banks of being "cartelized even in their answers," noting the identical narrative that no harm occurred. He urged the institutions to at least offer a public apology, given they avoided financial penalties. Initiative Liberal's Marta Ferreira Silva remarked sarcastically that if sharing sensitive pricing data yields competitive benefits, "perhaps it should be standard practice across all industries."

Right-wing Chega party deputy João Ribeiro framed the outcome as creating "a clear perception of impunity" and reinforcing the idea that "the powerful are above the law." Social Democratic Party (PSD) representative Hugo Carneiro reminded executives that class actions remain active and could result in substantial financial consequences for the banking sector if courts rule in favor of plaintiffs.

The Courtroom Record Versus Bank Spin

PSD deputy Marco Claudino read aloud internal bank emails during the BCP hearing, demonstrating that employees exchanged non-public, forward-looking pricing data that would have been difficult to obtain through public channels. This directly contradicted assertions that the information was already accessible via "mystery shopper" tactics or regulatory disclosures.

The trial court's final judgment stated that the coordination allowed banks to reduce commercial pressure and eliminate uncertainty about competitor behavior, a textbook anti-competitive outcome. It singled out individual mortgage borrowers as the most vulnerable group, citing their "recognized difficulties in establishing effective negotiation when the counterparty is a corporate entity."

What This Means for Residents

If you took out a mortgage, consumer loan, or financed a small business in Portugal between 2002 and 2013, you may be eligible for compensation through pending civil class actions, despite the banks paying no regulatory fines in this case. The ongoing litigation is examining whether affected borrowers deserve redress for the confirmed collusion.

Financial institutions have not acknowledged wrongdoing and maintain that intense competition during the period resulted in historically favorable rates. However, the legal finding of collusion remains intact, creating what legal experts call a "irrefutable presumption of infraction" that strengthens civil suits.

The Broader Regulatory Reset

The 2022 overhaul of Portugal's competition enforcement regime introduced several measures beyond the prescription fix. Maximum fines now reach 10% of a company's global turnover, appeals no longer automatically suspend penalties unless a 50% bond is posted, and the AdC gained expanded search-and-seizure authority. The reforms align Portuguese law with the EU's ECN+ Directive, designed to harmonize enforcement across member states.

The banking scandal has become a case study in why these changes were necessary. Despite clear judicial findings, the inability to collect penalties undermined public confidence in regulatory deterrence. Lawmakers are now evaluating whether additional legislative adjustments are needed to prevent similar outcomes in sectors beyond finance.

The hearings concluded with no immediate policy proposals, but the political consensus appeared to favor stronger accountability mechanisms. Whether the banks ultimately face financial consequences will depend on the outcome of civil litigation—a process that could take years.