With housing curbs, banks are offering “tassels” to provide more personal credit

At a time when the demand for mortgage loans is declining due to rising interest rates, banks are focusing on enhancing personal credit through more and more campaigns. There are financial institutions that offer Vouchers For customers who use a credit card, but also credit these cards with a portion of the money spent in the supermarket. There are also those who send notifications through mobile applications that offer personal credit, especially for purchases smart phones. The Bank of Portugal reduces the value of banks' activities, rejecting the idea that they represent a risk to the sector and customers.

There are many campaigns that you currently find once you enter the websites of national banks. “part Connected Your new credit card by January 30. “Don't pay a savings commission in 2024 and you can still earn up to €100 in Fnac vouchers,” announces Santander Portugal, in an offer to bank customers who obtain a Santander Credit Card or a Gold Credit Card, exclusively on the bank's digital channels.

At Caixa Geral de Depósitos, anyone who has or requires a Caixa Classic, Caixa Gold or Caixa Platina credit card can access Cash back. The publicly owned bank promises to return 1% of expenses “in supermarkets, pharmacies and at Caixa payment terminals in other sectors of activity” paid by credit card, but with a maximum of 10 euros per statement.

On the other hand, BCP reverses a portion of the expenses customers may incur on food onto credit cards. To do this, they must deposit their salaries with the bank. “From January 16 to April 15, 2024, when you bring your salary to the Millennium, you will get 10% back on all supermarket purchases you make using any card until December 2024,” announces the financial institution led by Miguel Maya, detailing that “the maximum amount you can “Getting it every month is 30 euros, always on the credit card linked to the account where you receive your salary.”

For example, BPI is adopting a more aggressive strategy, sending notifications to customers through its mobile app offering personal credit. “Discover the new instant credit simulator (11.5% APR) on your BPI app. Run the simulation for up to €30,000 and see if your dreams can become a reality,” says the bank, which is also To provide purchasing solutions smart phones. “When you buy a Samsung S24, get twice the equipment storage space as an offer, the campaign is valid from January 17 to 30, 2024,” the bank led by João Pedro Oliveira e Costa said on its page. Connected.

“Have you already replaced it? Then replace it now,” can be read on the website of the bank led by Mark Burke, referring to the image of an old computer. Novobanco even promises to provide a response within 24 hours, and if the credit is approved, the money will be deposited into the account Within 48 hours.

The regulator excludes increased risks

This bet is being made at a time when demand for this type of loan is increasing, but also when the maximum interest rates on these products are higher – the maximum interest rate on credit cards rose this quarter to 18.6%, a maximum of eight years. old. According to data released by the Bank of Portugal at the end of last week, consumer loans reached 21.2 billion euros in December, 500 million euros more than at the end of 2022. The regulatory body adds that these loans increased by 3.6% in 2023.

Along with this increase, there is also a decrease in the contracting of housing loans. Housing loans totaled 98.9 billion euros at the end of last year, 1.4 billion less than in December 2022.

However, BPI rules out that this bet will offset this trend in home loans. “This does not apply to BPI. In fact, the bank has gained a share in the production of housing loans and keeps its share in consumer credit stable,” says an official source from the bank led by João Pedro Oliveira e Costa.

When asked whether promoting consumer credit could pose a risk to the sector and customers, the BPI stated that it did not, as long as there was “appropriate risk assessment and prevention”. It ensures that the bank “always accurately assesses risk and the customer’s ability to repay, as evidenced by default indicators.” The remaining four banks did not respond to questions asked by Jornal Economico.

The Banco de Portugal also points out that “in Portugal, institutions are obligated to observe a set of principles and rules when marketing credit products to consumers.” In addition to the need to “ensure the transparency and authenticity of the information transmitted” when advertising these products, there are also a set of “requirements aimed at promoting responsible credit giving.”

“Institutions are obliged to evaluate the ability of bank customers to fulfill the obligations they intend to assume, that is, they must evaluate their solvency. Therefore, institutions should only grant credit (or increase the total amount of credit, if possible) if this results from the solvency assessment that the bank customer It is likely to comply with the obligations arising from the credit contract,” the regulatory body emphasizes, also noting that the macroprudential recommendation mandates, for example, that the ratio between the amount of the monthly installment calculated with all the borrower’s loans and his monthly income should not exceed 50%.

“The Bank of Portugal monitors institutions’ compliance with these obligations and adopts measures deemed appropriate whenever non-compliance is verified,” he stressed, recalling that “in the medium term, changes are planned to be made to the legal and regulatory framework.” By force.” Member states have until November 2025 to transmit the new directive, published at the end of October, on consumer credit contracts, which strengthens consumer protection in the context of consumer credit.