Margem Financeira Sustentável em Portugal

Abstract

The net interest margin is the main source of gain for banks and is the most direct form of remuneration from financial intermediate services. The average value of this margin has fluctuated considerably in Portugal since the mid eighties. At the same time regulations have been altered and competition has changed as new competitors have appeared on the scene. A wide variety of banks differing in scale and structure now operate on the market, some operating through retail networks and others carrying out their business solely through central agencies. This study analyses net interest margins and operating costs according to segments of banks. Banks are grouped into segments according to whether they have retail networks or not, and if they do, depending on the size of the networks. A distinction is also made between national banks and those with foreign capital. The study tests the statistical significance of the differences between segments, develops a model for a multiple linear regression to explain the interest margin based on the number and age of bank outlets and on indicators showing the type of assets and the source of financial resources. The conclusion is that of these possibilities variables referring to the origins of resources are the ones that best explain variations in the net interest margin. A model for sustaining the net interest margin is also developed based on the principle of the sufficiency of its contribution to the adequate remuneration of productive factors. The data used in the analysis and for the models refers to the period from 1985 to 1996 and was taken from a cross-section of Portuguese banks, representation of which varies from year to year between 86% and 100% from the number of banks.