Agricultural Credit expects to initiate the migration to direct supervision by the European Central Bank (ECB) and the Single Supervisory Mechanism (SSM) in 2027, in a process that will include asset quality exercises and stress testing. The information was provided by the group's president, Sérgio Frade, during a meeting with journalists for the presentation of first-half results.
This change results from two base conditions: the group having exceeded the 30 billion euro mark in assets and being the third most significant institution in the country. Currently, Agricultural Credit is under the direct supervision of the Bank of Portugal. Regarding assets, the group is still below 30 billion euros on a prudential basis, excluding the insurance business, but expects to reach that value this year.
Although it is the sixth largest bank in Portugal, Agricultural Credit is considered the third most significant institution by the ECB. This is because Millennium BCP, BPI, and Novobanco are entirely owned by foreign banks, namely Santander, Caixabank, and BPCE, which are already supervised at the SSM level.
Sérgio Frade stated that he does not expect ECB supervision to be more demanding than the current one, but acknowledged that the group will need to dedicate resources and attention to the process. The president highlighted that European supervision is more comparable with European jurisdictions, which places Agricultural Credit in a group of centrally supervised institutions.
