BCP's share price has underperformed the European bank sector by 60% since January 1999. What are you doing to address this problem? The share price is under pressure. This is partly due to the economic downturn in Portugal. BCP also has some exposure to the insurance sector and this is another factor. During this past year when the share price was depressed, the key issue was the bank's capital ratios. To some extent this was a self-fulfilling prophesy because capital was depressing the share price which in turn put added capital pressure on the bank.
It is now clear is that through our capital increase and rights issue, we have addressed and resolved this issue. We wanted to bring our tier 1 ratio up to the level it stood at in March 2001 and we have achieved this objective.
We gave a clear indication that there are other measures in the pipeline that will reinforce our capital position, such as the sale of [insurance business] Seguros e Pensões, the securitization process, the disintermediation of loans and so on. So the market can now be relaxed about our capital position.
Now the debate is refocused on where the share price should be, which is based on the bank's underlying profitability.
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