IRGAwards 2023 | BCP - Miguel Bragança

This was a very particular year, we continue to have this criterion as decisive to survive in such an uncertain context. It is increasingly so: the more uncertain the context, the more relative the environment, the more critical is the capacity to adapt. At the level of people specifically, it is very important to have the capacity to press at the level of institutions, and the challenge of having adaptable instructions is above all a condition of success. And when we have proven recipes of success, trying to adapt those recipes that brought so much success in the past to recipes that will have success in the future is also critical.

To be well adapted we have to start from a situation of resilience. Therefore, when we have a more volatile environment with heated and different risks, we have to focus particularly on the robustness of the balance sheet, on the capital buffers that allow us to absorb the main shocks. And we see that BCP in the last six months, for example, increased its capital ratios by 200 basis points, which is immense. The capacity to be very disciplined in decisions and also to think medium to long term, because it is a challenge often to avoid decisions that in the short term may even make sense but can compromise the medium and long term, because those are the ones that condition the adaptability of institutions.

A lot of it has to do with the culture of the organization and with a culture where we provoke people to prefer new ideas, not to be satisfied with the success of the past, not to be satisfied with the processes made with the recipes of the past. And when someone comes to us with a solution, sometimes even wanting some frustration, we say: we understand the solution, but we would like you to understand that there are no more two or three years to compare with these, and to provoke, in fact, to provoke innovation in people. And innovation in various senses, not necessarily innovation only at the product level, but innovating in the decision itself, continually assuming a challenger perspective in the decision processes. That also involves not having a culture too adapted, too much like the 'engrossaxónicos' say of SM, meaning the hierarchies themselves accept criticism well, the hierarchies themselves accept being challenged on some of their decisions, even those already taken or some people a priori, to arrive at a better decision because it is fundamental today to be available for that. Or the environment suggests or leads to being perhaps more conservative, more defensive, more difficult to work from the point of view of that culture. I think it is a leadership challenge, isn't it? There was a person who ironically said, exactly to challenge that leadership challenge, saying: 'I want you to be totally transparent with me, even if it costs you your job.' Obviously it cannot be that way, obviously people are joking, but with provocation. Obviously people need to feel safe that even when they challenge opinions, even when they are uncomfortable, when they are in a group decision process and ecology where there are different opinions, people perceive that different opinions are not seen as a personal issue, and that dialectic of different opinions gives birth to a better decision.

And I think that Portuguese culture itself, the Portuguese management culture, is evolving in that sense, I don't know, being less hierarchical, more available, more flexible, more long-term. Clearly, look at management today, 20 years ago, there is no doubt, there will be differences between companies, but clearly one sees a long-term perspective.

I think we have to ensure at every moment that the bank is well prepared for the risks that come. That is, more than trying to anticipate the risks, which is very important, we have to do... I increasingly think that strategic thinking is more important than strategic planning, because it is impossible to plan everything. It is continuously trying to anticipate what may come, but more than anticipating what may come, because there is always something we are not expecting. Do you think there were people who were expecting a covid, a war? No, at least not the month before it happened. So we guarantee that we are prepared to adapt, whatever it is, with a good capital base, with people who understand what is happening, with systems that are flexible, with systems... not only decision systems that are sufficiently flexible.

The position of the financial issuer is often easier said than done. The focus is on value generation. When I talk about value, I don't talk only about short-term value in results, but ensuring that we are points between internal decisions and value generation. Different keys, and sometimes obviously easy decisions are not easy, and often they are only possible to define a posteriori. I would say that in this context, one of the main risk factors, particularly in banking, the responsibility is on me, is reputation. Obviously, the pressure on families, namely the interest rate, a level of exposure quite different, for example, from what it had during covid when it played an important role, but in a quite different context.

I think communication with transparency, explaining the decisions, is common. But it is a bit like that. And for each bank, yes, its reputation is more important than the global reputation of the system. Obviously, we have to manage what we can manage, and we have to be humble in what we can also. And it is not up to a mission to manage or try to change the global reputation of all financial matters. I mean, we have to manage what we can, each one has to do their work. And what I think is particularly important in our case is that people look at BCP and see that BCP is a correct institution with people, a mission that treats clients as each of us would like to be treated as clients, and that basically explains its decisions. Except that sometimes banks are unfairly criticized, or are we not talking about the present as well?

I think that in general in Portugal we have some difficulty in sharing even a market economy. What is important in the microcosm of the market is that there is competition, that customers are well treated, that there are no corners, they can explain better service, and more than having top-down guidelines more typical of a planned economy about where variables should be. Either we believe in a market economy and we believe that in the long term it is a market economy that makes us, or we don't believe. And in general, I would not say that I felt unfairly treated. I feel that in Portugal there is some lack of awareness and a lack of sharing about the virtues of the market economy, and what is very important for us to be able to attract capital, that these things are missing, isn't it?

Responsibility of companies, all financial leaders, create a system of merchandise for all, we all have responsibility, but also the people themselves. No one is a very good judge in their own cause. Often when people speak in their own cause, there is always a deficit of capital of convincing others. Now I think that we often, for a country, for certain banks, media, and everything, we ask for this practically: public interventions. In fact, it often happens that the public authorities themselves are forced by public opinion to make decisions that in other countries are not within the competence of the public sector. And that is how it is. When there is some small disaster, then the state will pay for it very easily. Very easily, public opinion and the state intervene. And that leads the state and politicians to feel almost conditioned to intervene in situations where in other countries they do not feel conditioned. With the country we have and our history, we still have a path to go. And then the problem is that this generates, in the long run, that if de facto there is an excessive public intervention in what should be private decisions, this may even not attract the capital that we as a country need.

It is not attracting, in recent years, it is notorious, for example in the real estate sector, what is happening in these last moments. I think it is important that this relates to the Words and our relationship with investors and our relationship with capital. And I think, contrary to what happens in other dimensions of our economic development, in my opinion, there is not a sufficient sense of urgency. Therefore, a country with a capital structure like ours, to attract capital to develop and to ensure the best standard of living for the Portuguese, there is not a sufficient sense of urgency compared to what exists in relation to other dimensions, where the state will always compensate. And the big problem, I think, is that it is not obvious that countries that base their development on state investments can have a sufficient rate of economic growth to meet the expectations of people in a consistent and sustainable way. And above all, there is another topic: even if we admit that a large state can be a good contribution to development, that is so if we have a management structure of that state that is larger, and that means reforms that are also difficult, also difficult to do by politicians.

BCP has for many years had a very broad customer base that favors capturing young accounts even when young people have almost no income, so that they can easily enter their financial life. And we have important courses, and we have a large set of customers that we end up serving for a matter of social responsibility, at a cost of service that is not fully compensated from a customer perspective.

I don't know if the criticisms of BCP's fees, because BCP's logic is not to have high unit fees. BCP's logic is to be the first bank of the customer, and that the bulk of the customer's transactions are with BCP. Therefore, our logic is much more a logic of transparency and a fixed monthly fee, like a Netflix model. We made a subscription model, totally transparent, you know exactly what you pay, and for what you pay you get much more services than you would if you paid per piece, for example, in other banks. And seeing the totality of what the customer receives, really, we are not... obviously, when you see the total fees that BCP receives, it is consistent with that strategy, which is with customers who actually use many financial services.

I think above all we have to ensure that we do not make decisions without taking this variable into consideration. More than anything, it is important that institutions realize that in the long term, the issue of social responsibility is important and that it is part of the social responsibility of each of us and of institutions also not to leave the Portuguese behind. Obviously, this has to be done with measure, because as I often say, it is easy to do charity, and we have to have a very clear notion: our money is from the shareholders, we have to be careful. Our money that we offer, what we can potentially lose, ends up being losses. So we have to do things, like everything in life, with balance. Thank you.