Research Report - Millenium Bank BCP

Abstract

Banco Comercial Português (BCP) (English: Portuguese Commercial Bank), is a Portuguese bank that was founded in 1985 and is the largest private bank in the country. BCP is a member of the Euronext 100 stock index and its current chief executive officer is Carlos Santos Ferreira. BCP is based in Porto, but its operations are headquartered in Oeiras, Greater Lisbon. It operates a branch brand dubbed and restyled in 2004 as Millennium BCP.

It has nearly 4.3 million customers throughout the world and over 900 branches in Portugal. In 2008, it reported a profit of €201 million. It was ranked at number 453 in the 2007 Forbes Global 2000 list. BCP was founded in 1985 by Jardim Gonçalves and a group of investors from the Porto region.

Since 2004, it operates a branch brand dubbed and restyled as Millennium BCP, following a process of amalgamating all the brand names and complete incorporation of all commercial structures of the group's retail banking:

- Nova Rede (the bank's brand for his own network of retail banking branches since 1989)

- Crédibanco (network of branches created by the BCP itself in 1993)

- Banco Português do Atlântico (acquired in 1995 and incorporated in 2000)

- Banco Mello (acquired in 2000 and incorporated in 2000)

- Banco Pinto e Sotto Mayor (acquired in 2000)

Literature review

“The value of loans to households grew by 314 million euro in August and September, according to data from the Bank of Portugal. The value of loans increased in August in all segments, especially for housing loans, which reached 113,110 million in September, more than 271 million euro in August.

In the credits for consumption, the value increased by 28 million euro, while for other purposes, the credit increased by 15 million. With regard to the doubtful loans, this only increased consumption, having fallen in other segments and housing purposes.”

(http://isabe.ionline.pt)

“In 2003, Portuguese consumers were much happier to pay using cash than by credit or bank card (59% and 24%, respectively), but their inclination to pay by checks was lower (16%). Cards are much preferred to checks. The rapid increase of ATMs in Portuguese towns means that cash points are very much more accessible than in the past. According to European Research Group EEIG, January 2004, 80% of respondents said that ease was the reason for their preferred method of payment. The second most popular reason was to avoid theft (11%).”

(Public Opinion in Europe — Financial Services Report B, Standard Eurobarometer 205, Wave 60.2, European Research Group EEIG)

Table 1: Portuguese Consumers’ Reasons for their Preferred Means of Payment (%), 2003

Reasons Percentage

Easy 80

Avoid loss or theft 11

Safety 6

Avoid dispute 4

Good price or cheap 4

Avoid attack 1

Other 5

Don’t know 0

(Public Opinion in Europe — Financial Services Report B, Standard Eurobarometer 205, Wave 60.2, European Research Group EEIG, January 2004)

“The prospects for Portuguese cards are good. Despite the general economic situation, the Portuguese have become sophisticated users of cards. The rapidly growing market for credit cards means greater competition than in some neighboring countries, and the fast expansion of terminals increased the opportunity to make use of cards. Key Note expects that the credit-card demand will continue to expand between 2005 and 2010, although not at the rapid pace experienced by MasterCard, for example, in the past 5 years.”

(http://www.brandlicensing.co.uk)

Introduction

Millenium Bank BCP wants to introduce a new type of card VISA Electron that will be named CréditoEstud. This card is aimed at students and offers the possibility to obtain a consumer credit with values between 500-2000E.

To see if this card will have the desired success, we made a market research. The method used was questionnaire survey.