Portugal's Banking Cartel: €82M Fine Disappears, but Borrowers' Fight Continues

The Portugal state-owned lender Caixa Geral de Depósitos escaped an €82M penalty for anti-competitive conduct after a judicial ruling declared the case time-barred, yet its CEO now admits the sum would have hit the institution hard—describing it as "very much money" in absolute and relative terms during parliamentary questioning.

Why This Matters:

• 14 banks dodged €225M in fines after an appeals court ruled the cartel case prescribed, despite a first-instance conviction in 2024.

• CGD alone faced an €82M penalty—the steepest individual fine, calculated based on turnover—but paid nothing due to the statute of limitations.

• Class-action lawsuits have been launched by borrowers seeking damages, with claims targeting the 11 lenders accused of rigging spreads on mortgages, consumer loans, and SME credit between 2002 and 2013.

• Parliamentary hearings took place to interrogate executives after the Constitutional Court rejected appeals, cementing the annulment.

How a €225M Penalty Vanished

In September 2019, the Portugal Competition Authority (AdC) slapped 14 banks with €225M in fines for swapping commercially sensitive data on lending spreads across three product lines—home loans, consumer finance, and corporate credit. The regulator concluded that traders and relationship managers exchanged pricing intelligence and risk variables that dampened competition for more than a decade, costing households and businesses the benefit of genuinely competitive rates.

The Tribunal for Competition, Regulation, and Supervision upheld those penalties in 2024, obliging each institution to post bond while appeals wound through the system. Months later, the Lisbon Court of Appeal declared the infractions prescribed under the 2012 Competition Act, which set a ten-year-and-six-month ceiling for enforcement. Because the alleged conduct stretched from 2002 to 2013, the deadline fell before the lower court's confirmation. The Constitutional Court declined to review the ruling, making the outcome final.

Although no bank paid a cent, the judiciary never absolved the lenders on the merits; the AdC emphasized that prescription is a procedural bar, not an exoneration.

What This Means for Borrowers and Market Confidence

Consumers who took out mortgages, car loans, or SME facilities during the collusion period experienced lending spreads that were artificially inflated—a pattern that affected pricing during the eurozone sovereign-debt crisis years. Unemployment, wage cuts, and tax hikes during this period compounded financial pressures on households and businesses.

Collective redress actions have been launched through the courts, naming individual institutions or groups of lenders. These suits pursue compensation based on claims that borrowers paid artificially elevated rates during the cartel period. Should plaintiffs prevail, payouts will come from bank balance sheets rather than state coffers, even for CGD.

During parliamentary questioning, CEO Paulo Macedo deflected accusations that CGD orchestrated a cartel, insisting clients suffered no harm. He reserved his sharpest language for the class-action sponsors, calling the lawsuits "opportunistic" and the claimed damages "disproportionate." When pressed on whether the €82M fine would have imperiled CGD's solvency, Macedo replied no—but warned that multi-plaintiff litigation "could threaten the stability of the financial system" if courts award substantial indemnities.

Internal Overhaul and the Example Burden

Confronted by lawmakers with email evidence—messages showing CGD employees discussing pricing with rival-bank counterparts—Macedo outlined compliance changes since 2019. In 2020, CGD amended its Code of Conduct to explicitly prohibit the exchange of commercial intelligence, citing both competition law and the General Data Protection Regulation. The revised rules also ban concerted practices and cartel agreements, which Macedo claimed "we understood were not happening, but decided to make explicit."

He acknowledged a heightened duty: "We have a special responsibility—not as a legal matter, but as a question of setting an example," a nod to CGD's status as a government-owned lender that absorbed a €5.9bn taxpayer bailout in 2017. The bank now runs mandatory training modules on anti-competitive conduct and escalates any cross-bank communication through a centralized compliance desk.

The Parliamentary Gambit

Lawmakers pressed executives on the implications of the prescription ruling. Some framed questions around the signal such an outcome sends to market participants. Others highlighted CGD's financial performance—the bank recorded substantial pre-tax profits in recent years—to question whether the €82M penalty would genuinely have caused hardship.

Evidence presented during questioning included email excerpts showing CGD staff coordinating with competitors on spread trajectories, evidence the first-instance tribunal found probative. Yet the judicial ruling on prescription rendered those factual findings procedurally immaterial to the final outcome.

Outstanding Litigation and Client Redress

The collective actions likely hinge on arguments about whether spreads during the 2002-2013 period contained an artificial component attributable to coordinated conduct. Banks counter that funding costs and market conditions during the 2008-2013 period saw genuine shifts across the eurozone, complicating assessments of what rates would have been absent collusion.

The class-action process will test whether courts accept econometric models that attempt to isolate anti-competitive effects from broader market movements. This litigation will determine whether borrowers receive compensation for the rates they paid during the cartel period.

What Comes Next

The class actions will likely take considerable time to resolve, with final judgments potentially taking several years. If courts award material sums, defendant banks can appeal, stretching timelines further. In the interim, the parliamentary hearings serve a symbolic function—putting executives on record and signaling to voters that lawmakers take competition enforcement seriously, even when the judiciary cannot deliver financial consequences.

For borrowers who locked in mortgages between 2002 and 2013, the prescription ruling means no administrative fine will offset their higher interest bills. Whether civil damages fill that gap depends on judges' willingness to endorse the econometric models plaintiffs deploy and on banks' appetite for settlement once discovery exposes internal communications to public scrutiny.