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In the first half of 2024, the Portuguese banking sector continued to improve profitability in a context of great political uncertainty at a global level, inflation and economic slowdown. This improvement resulted from the positive contribution of total operating income, despite more moderate growth in net interest income, and net provisions and impairments, which more than offset the negative contribution of operating costs.
The sector's solvency strengthened further and reached historically high levels, while liquidity remained robust. In this way, the sector has strengthened its resilience and ability to continue to respond efficiently to the economy's financing needs, should any adverse shocks materialise, particularly those that may result from the current geopolitical tensions.
In the current extremely challenging economic, regulatory and competitive context, it is also essential to continue the digital transformation of financial services, the transition to a sustainable economy and the incorporation of these challenges into risk management, as well as strengthening operational resilience in the face of threats arising from increasingly sophisticated cyber-attacks. Climate change represents another critical challenge for the financial system due to the risks involved, namely transition risks, related to the devaluation of assets in fossil fuel-intensive sectors, and physical risks, related to direct damage from extreme weather events that occur with greater frequency and severity.