Merged banks stoke up the competition

The frantic round of deal-making in Portugal's banking sector triggered by António Champalimaud's decision to sell off his string of privately held banks has now come to a halt. The music may have stopped, but the dancers are still eyeing each other to see who might make the first move in another round of consolidation. The key partner over which a takeover contest might develop is Banco Português de Investimento - now the smallest independent publicly held bank in Portugal since the proposed merger between it and the family-dominated Banco Espirito Santo fell through.

The end result of the break-up of the Champalimaud empire is that there are now four main domestic banks. In the first rung are Banco Comercial Português (BCP) and the state-owned Caixa Geral de Depósitos, which between them control more than half of the domestic market.