Portugal’s Montepio Bank to Tap New CEO as Members Demand Bigger Returns

A low-profile email from Lisbon on Thursday evening confirmed what many in the banking community had suspected for weeks: Pedro Leitão will not return as chief executive of Banco Montepio. The decision, taken by the bank’s controlling shareholder, Associação Mutualista Montepio Geral (AMMG), triggers a leadership transition at one of Portugal’s oldest financial institutions and opens the door to a fresh strategy just as higher interest rates begin to bite.

Snapshot of what changes — and what stays

• Mandate 2026-2029: AMMG says the next board will mix "renewal and continuity".

• Name withheld for now: Press reports point to José Azevedo Pereira as the frontrunner, but the mutual insists the list remains confidential until regulators rule.

• Regulatory clock: Banco de Portugal has already started its fit-and-proper assessment; the shareholder vote is pencilled in for April.

• Underlying tension: Profit slipped 10% in 2025, even after a sweeping restructuring that boosted capital ratios.

Why the shake-up matters for Portugal

Banco Montepio is no ordinary lender. Born in 1844 as a savings mutual, it still answers to more than 620,000 member-owners, many of them pensioners who rely on dividends to top up monthly income. That unusual governance model means leadership changes ripple far beyond the trading floor. A weak year in which net profit fell to €86.4 M — versus €109.9 M in 2024 — sharpened calls inside the mutual for "new energy" at the top. Virgílio Lima, recently re-elected to run AMMG until 2029, wants heftier payouts and has openly said the bank "started its turnaround later than peers". Removing Leitão signals the mutual’s impatience and its willingness to try a different management style.

The likely successor: a tax-man turned banker

Although official silence prevails, multiple newsrooms cite José Azevedo Pereira as the board’s preferred candidate. The 65-year-old economist earned a reputation for tenacity while directing Portugal’s Autoridade Tributária, where he modernised digital tax filings. He later spent two years at the helm of EuroBic, stabilising the mid-size lender after the Luanda Leaks storm. Supporters argue his mix of public-sector discipline and private-sector restructuring chops is tailor-made for Montepio’s capital-light, retail focus. Detractors warn that his brief spell in commercial banking leaves unanswered questions about long-term vision.

Reading the balance-sheet tea leaves

Leitão’s supporters can point to progress that is easy to overlook. Since 2021 the bank has shrunk its non-performing loan ratio below 5 %, doubled its digital-only customers and secured a BB- rating from Fitch, an uptick that eases wholesale funding costs. Yet 2025 illustrated how fragile momentum remains: higher funding costs ate into margins, and fee income plateaued. To the mutual, those headwinds justify "course correction". Insiders say the new board will focus on three fronts: cross-selling insurance, accelerating branch consolidation outside Lisbon, and a stricter dividend timetable linked to cost-income targets.

The road to April: regulatory hurdles and political optics

Before any shake-up becomes official, Banco de Portugal must vet each proposed director for honorabilidade e competência — a process that can take up to 60 days. Only then will AMMG convene an extraordinary shareholders’ meeting, expected after Easter. Both steps are more than box-ticking. In past cycles, Montepio’s governance has drawn scrutiny from the European Central Bank, which urged clearer separation between the mutual and the bank. Sources close to the dossier say the incoming slate will expand the number of independent directors to at least 4 of 11 seats, a move designed to mollify supervisors and reassure investors in the bank’s €500 M of outstanding bonds.

What it means for savers, borrowers and staff

For everyday clients the switch should feel seamless: mortgage rates and branch services will not change overnight. Over the longer run, however, successful execution of a new strategy could decide whether Montepio remains an autonomous brand or becomes consolidation prey in Iberia’s crowded banking landscape. Employees — roughly 3,200 people — will watch headcount plans closely; the last restructuring round in 2023 avoided layoffs, relying instead on natural attrition. Union officials told this newspaper they expect "transparent dialogue" once the new CEO is in place.

A wider signal to mutual finance

Portugal’s co-operative and mutual sectors have struggled to prove they can thrive under modern capital rules. By opting not to reconfirm a sitting CEO who delivered modest profits but missed stretch targets, Montepio’s members are asserting a shareholder discipline often associated with pure stock-market players. Whether that gamble pays off will be clear in spring results next year — the first that will fully bear the imprint of a new leadership team.

For now, the only certainty is change: Montepio’s next chapter begins the moment Banco de Portugal gives its nod.