Portugal 2000

Fernando Pessoa, Portugal's great modern poet looks on as a moble phone user chats.

Banking Consolidation

Portuguese banks have been at the forefront of domestic consolidation in Europe. To date, these strategies have proved highly successful, with the leading Portuguese banks showing some of the highest returns on equity in Europe.

Three big takeovers in 1995 and 1996 increased the market share of the top five banks from 45 to almost 80 percent. Moves towards further consolidation were temporarily stalled last year by a stand-off between Portugal and the European Commission over a proposed alliance between Banco Santander Central Hispano, Spainís biggest bank, and the Champalimaud group, Portugalís third largest financial group.

The conflict was resolved by an agreement in November under which BSCH has acquired two banks that formed part of the Champalimaud group, Banco Totta & AÁores and CrÈdito Predial PortuguÍs. Banco Pinto e Sotto Mayor, previously the Champalimaud groupís main bank, has gone to Banco Comercial PortuguÍs.Portugalís banking world was shaken in March by the collapse of a planned merger between Banco EspÌrito Santo and Banco PortuguÍs de Investimento, which would have created a rival of a similar size to BCP, now the countryís biggest bank.