· Personality · · T. Filomena Abreu · P. Nuno Almendra

António Ramalho

«A person should stop playing while still part of the starting line-up»

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The rebelliousness of his youth made him study law, but it was as a manager that he has stood out throughout his life. In and out of banking. He often says that the market is attracted to him in times of crisis, but he also admits the opposite. Perhaps this is why he took on the presidency of Novo Banco, with the difficult task of making the memories of the ill-fated BES disappear. The idea was to stay for six months. When he got there, he thought he would only stay for six days. He ended up staying for six years. António Ramalho will leave the post in August, but until then he pledges to work, body and soul. His greatest legacy is the restructuring of the controversial institution that he set on the path to profits. A path marked by controversy and heavy scrutiny that catapulted him into the political spotlight. He ends up as he began, a fan of challenges. 
You are a trained lawyer, but the truth is that you have been in management almost all life. How would you describe your career? 
I am the son of a mathematician and a financier. My father was a banking director, my mother a professor of applied mathematics. So, all my background was quantitative. I don’t know if I did it out of revenge, going against my parents, which sometimes happens when you’re young, but I decided to go into law, which I think, from a linguistic point of view, is the closest approximation to mathematical abstraction. Because we have to start from various hypotheses in order to draw certain conclusions. I studied at UniversidadeCatólica, which at the time still had a great contribution from the management structure, because Management had preceded Law at the Catholic University of Lisbon. And that allowed me, from an early age, to have a vocation very much focused on banking, on the financial industry. And as I had a very good mathematical preparation, a good quantitative preparation, it wasn’t difficult for me. So, I was always a manager particularly focused on numbers, and focused on quantifications, which is strange for someone who has a basic training in law. And that’s how it was. My career as a manager started basically at the Portuguese Banking Association. Then I specialised in financial markets and capital markets, which was a fairly unknown thing at the time. I trained in Oxford, which later led me to go to Banco Pinto e Sotto Mayor. I then joined the Champalimaud Group, where I became a director at the age of 32, and that was perhaps my greatest experience, the one that most affected me as a financial manager. Then came Santander, followed by years of working, sometimes in banking, other times outside banking, because I also had my experiences outside banking, in companies from all sectors, where, in some way, challenges were an essential element. 
What characterises my career? My career is that of a millennium in a slower body. I have performed assignments that have not had too long a period, because I think that turnover is one of the fundamental instruments of modern management. So, I exercised that turnover with great intensity. I ended up managing four major financial groups in Portugal, the Champalimaud Group, or I contributed to the management of the Champalimaud Group, the Santander Group, the Millennium BCP Group and the Novo Banco Group. And outside my work in the banking sector, I managed CP (Comboios de Portugal), of which I was chairman, Estradas de Portugal, Refer, where I was responsible for the merger of the two into Infraestruturas de Portugal, of which I was the first chairman. So, I would say that it was a working life always focused on meeting financial needs, but very rich from the point of view of experiences, learning and the contribution I received from all the teams I managed, because we are nothing more than team motivators. 
So, are you satisfied? 
Very satisfied. I’ve had a full life, as you can imagine. 36 years in banking, 29 years in management of large companies. I have been CEO of companies for more than ten years. It is a very intense life from the point of view of, shall we say, the contribution we try to give at all times to society, and the impact we manage to have, sometimes clearly more successful, sometimes less, always with diverging opinions from those who manage with us, but I have left great friendships everywhere and above all else a huge capacity for learning. 

«We are nothing more than team motivators» 
You have said a few times that the market has a certain attraction for you when there are periods of crisis. Based on that assumption, two questions: Why do you think this happens? And isn’t this a time of special crisis for the ‘crisis man’ to leave? 
It is true, I have said it several times, because a manager has a technical dimension, an emotional dimension and a human dimension. And my technical dimension and my technical virtues are mainly in quantification, in learning from experiences I’ve had. From the point of view of my human qualities, they are the ones I have. I am a stable person, with a very stable family structure. I like what is referred to as a traditional Portuguese life, a family structure, calm and serene. From an emotional point of view, I seem to be well prepared for difficult moments. That is to say, I’ve never seen a difficult moment that wasn’t an opportunity. And so, in all situations where there are suddenly many difficulties, I am normally a manager who is emotionally well-equipped to respond to those difficulties, bringing people together, motivating teams, finding solutions, never giving up. And if you think of Infrastructures or Estradas de Portugal, if you think of Novo Banco – because at the time I came here for six months, when I arrived I thought I would stay for six days and I ended up staying for six years –, if you think of the challenge of Unicre, when there was great doubt from the Competition Authority, or that I went to Millennium BCP exactly during the biggest crisis it had in 2010, that I entered Sotto Mayor in 1993, when it failed its first privatisation and everything indicated that we would have problems, I would say that life has taught me to be very well prepared for these situations. So, naturally, I usually say that people also look at me in the light of those situations. I will not deny that if the market is attracted to me, I am also attracted to those situations. But we must also be aware that there is a moment in our lives when we are close to exhaustion. And that is what is happening now. So, in the specific case of the bank, the part of the mission that was my responsibility is done. The bank is restructured and healthy for the market. On the other hand, it is true that there is a crisis in society. I don’t know what other opportunities will come my way in life, but I am also very aware that I have to ensure that I learn from reputation and phasing out. A person should stop playing while still part of the starling line-up. And knowing how to leave is as important as learning how to come in. I think the time has come to ensure this turnover model. I have often advocated that terms in office cannot go on forever. All the examples of perpetuation that I’ve seen in company management, country management, etc., have turned out badly. So, I think turnover should be an exercise that we ask ourselves, because there is a difference between status and situation. What we play in society are situations. The status we have is eternal, is being parents, being children, being grandparents, being husbands, being wives. These are statuses and these are permanent. The rest are situations and these situations must turnover naturally. 
What is the great legacy you will leave? 
This we’ll see in August. I’ll be here in my full capacity until August, but I think I’ll leave, shall we say, what was apparently difficult to achieve. The bank was dissolved in 2014, it had no solution until 2017, and I am the third chairman of this bank and somehow, I was here to witness the possibility of capitalising it, with the effort by the Resolution Fund, with the effort of private shareholders, with the effort of bondholders, with the effort of Portuguese taxpayers. But what I think you would expect, and what you will think in the future, was whether all that effort was justified to achieve the goals defined at the time. And we achieved, religiously, all the goals that were set in 2017. Exactly within the framework of the budget and the timings. What I leave as a legacy is the fulfilment of this phase. Additionally, I leave something else. It is that throughout this period we did not fail to have the motivation of the teams to serve the economy, to serve society, to use their own skills for what is the function and the impact on society that companies should have. And if you think, we had an additional test, because when we were right at the end of our restructuring process we had the pandemic, and the bank was the first to go to the market to respond to what the needs of companies were, and it made a remarkable effort, as good as the other banks, but at a time when you might think that it was not in condition for that and it was. So, my great pride is my employees, curiously, it is the most secret pride I have: at all times, they never stopped thinking about the Portuguese economy. The rest are minor details. Some of them obviously always leave a lot of emotion, so to speak. But the essential thing in management is to achieve the key objectives, which in this case were achieved. This is the legacy I leave behind.  

«I’ve never seen a difficult moment that wasn’t an opportunity» 
You will continue as consultant. Is the idea to slow down your pace? What would you like to do with the free time you may have? 
I have three grandchildren, all very close together, and I want to spend a little more time with my grandchildren than I did with my daughters. And give back the family a little bit of this effort that has been asked of them during these 29 years of high-level administration. That is my first goal. The second, is to make my high-impact professional contribution to society in the best way I can. And, at this moment, what I can give is precisely by being a consultant, by being an advisor, even though I am going, right now, to do another academic, non-executive, refresher course. I will go to Switzerland and then to the United States. To go from being an executive to being a non-executive also requires an academic exercise. And I am no longer young. I’m going to be 62. In modern society, I think people should have several professions during their working life, because the previous solution, which was to have an academic career until 25, then a professional career until 65, and at the end a retirement, is not compatible with what the learning that is necessary during life is today, but also the time we have available to work and have an impact on society. So, it will be a new era in my life. 
Leaving Avenida da Liberdade, Novo Banco will be one of the last major banking institutions to abandon the heart of Lisbon. Don’t you think we may be facing a loss of heritage and cultural identity? 
The problem you raise is interesting because there are several dilemmas that have to be read in conjunction. The first is that there is a need to give workplaces a different context in the post-pandemic era. The balance between working at home and working in the office, the need for additional flexibilities, but cultural encounters that also determine the culture of companies, leads to the outside of buildings being more relevant than just the inside. And that sends us out of the city. Thank God the bank already had a group of premises in Taguspark and a campus area. What we are going to do is to greatly improve that whole structure and find a model to respond to the needs of the 21st century, from 2022/23, to offer better conditions to a type of work that is different, where you need more space, where you need a type of work where the conjunction of in and out is more valid. And, simultaneously, where ‘home office’ and ‘work place to live’ are more defined. We think we have all the right conditions to do it. That frees up this building for us. But that is not the reason why we want the campus. The campus is a new concept, more modern, more suitable to this reality. But, on the other hand, your question is a question that is cultural in nature. I think that, on the contrary, giving back to the city centre some of its residential character and some of its people-focused nature, areas that are not just workplaces from 8.00 am or from 8.30 am to 6.00 pm, is positive for life and for the heartbeat of cities. And in the big cities, such as Lisbon or Oporto, you can feel that they are more alive, more effervescent, more real, even if the centre is normally occupied by foreign residents. But the truth is that tourism itself is, let’s say, occasional residence. And, basically, what is valued is its activity and its reality and its identity, from a cultural point of view. The ability to combine these various dilemmasis up to the people who manage these territories. Surely you will lose more workplaces between 9 a.m. and 6 p.m., but maybe you can add valueto these assets for later on. One of the advantages of moving between many jobs is that I have worked almost everywhere in Lisbon and outside Lisbon. For young people like you, Filomena, this is not relevant, but nowadays I am moved when I go into the Chiado or to Lisbon’s Baixa district at night, because I worked in Lisbon’s Baixa and when I left the bank, whether Crédito Predial or Totta, I wouldn’t see a soul at 8pm. And today, feeling people living in the city is much more valid. You have to combine this, obviously, so that the city doesn’t lose its own characteristics. I don't think that Portugal’s two major cities, Lisbon and Oporto, can lose their own cultures. First, because Lisbon is a city of the sea. The river and the sea create a mirror of water that gives it a light that no other city has. And, secondly, because Oporto has a little English touch, it has a touch of traditional structure that it will never lose. Therefore, I say that both cities are very characteristic, very consistent and the return of the centres to the people that has occurred in the last few years, whether due to tourism, or due to residence, although residence is preferably foreign, because of the prices, I think it is quite positive for the city. So, let companies go in search of their larger, greener, more ecological and more sustainable spaces. Because people, after leaving Taguspark at 6pm, will probably come to dine in the centre of Lisbon with other tastes and a different enthusiasm.  

«Knowing how to leave is as important as learning how to come in» 
The profile of investors has been changing. Have banks been able to keep up with this change in real estate growth?  
I think they have. We have real estate investment at the moment that develops from some imbalance, almost inevitable, between supply and demand. This is happening for various reasons, which the pandemic has compounded. Firstly, because it brought a significant increase in the savings rate of families. Portuguese savings rate rose to 11.5% at the end of 2021. Then, very low interest rates were maintained and with very low interest rates there were no significant investment alternatives. This brought a huge increase in liquidity. Together with these three purely financial reasons, there was a change in behaviour, in which the ‘refuge living’ gained in value. In other words, we can see this in people who, for example, have found a place to live outside the major cities. But we have also found people, near the cities, wanting different conditions to live in, because they knew that they had to work at home, for a while, that they had to have their children at home, and that they had to deal with this new reality. Naturally, this triple financial reason, added to this reason of difference in behaviour, where the distance became shorter and mobility became more difficult, which is a strange thing, made us digitally closer and, however, mobility became longer, because with the difficulties of the pandemic it is more difficult to find models of movement. The combination of these two effects naturally brought a very significant attraction towards where people live. I think that the Portuguese who were reasonably reconciled with their homes began to think about whether or not they could change their homes. And just as the Portuguese were thinking, so were foreigners. And naturally, foreigners have different benchmark values from ours. This happened exactly in the period when supply was recovering against demand, but supply had not yet reached demand levels and the pandemic naturally delayed the growth of construction. And so, when we now reach 160,000 or 170,000 houses sold per year, we don’t have production for these houses and what happens is a rise in prices due to these circumstances. And we saw this in new home purchases, that grew in 2021by 42.6%. And in existing homes, 61.2%. That’s a significant number in value. Not least because this also brought good returns, from a financial point of view they were good. Just to give you an idea, the return on investment that is made in residential property is 4.7% in Oporto and 4.1% in Lisbon. You can’t get any savings account that even comes close to giving such gains. Of course, these characteristics have brought this problem of foreigners to the city centres. According to the National Statistics Institute, in 2021, foreigners purchased in Lisbon at €4,283 a square metre, while the average Portuguese was €1,858. Foreigners paid more than double what the Portuguese paid, and naturally in the more exclusive areas. But this phenomenon is on a global scale.  
We are the country that has an entirely unique waterline and light conditions. We have an extremely good level of European mobility, because all our destinations start from the city of Lisbon, with easy movement in terms of the airport, which is within the city. We have good health conditions. Then, we have a small country that, into the bargain, is connected by good, adequate motorways. We have a wonderful fibre optic network that allows us, by the way, to accelerate the 5G processes, even though we started late. This is very attractive to foreigners. In addition, we are not expensive for the European average. So that basically means that we are a very attractive territorial space. It is normal that these areas become the model of investment enticement. Have we adapted to that? I think we have.Or, we are striving to. We, for example, have a level of mortgage loans for non-residents that is considerable. How did we do it? First, we adapted our staff to many languages. We speak all the languages here. If it’s Swedish, we have Swedes responding, if it’s Chinese, we have people who respond in Chinese, plus English has become a lingua franca, but one that meets, so to speak, the current needs. We have also adjusted our fin models and, above all else, we combine responses in relation to the needs that residents have, which are different from the needs of non-residents. Now, what do non-residents also need when they come to Portugal? Support to play golf, support in the area of health and support in the area of schools. Because they need to fit solutions around their families if their families also come here and education is fundamental. The health area is essential because they need to have security, to know that they have answers and, curiously, also what we know is healthy living, outdoors. I told you golf, with respect to Villas&Golfe, but it’s not just golf. It’s golf, it’s cycling, it’s walking, it’s adventure. These are part and parcel of what nowadays is essential for foreigners to feel good in this country, and with the level of security that we have, we can move around anywhere without any additional risk. Or without any perception of this additional risk.  
Basically, we responded to needs that were not only those of having a house. And I think that financial institutions have also quickly adapted, and we know this because competition has increased. 

But the valuation of property, in relation to the sale that is made, creates a problem for those who are from here and continue to have a salary that fits the country they have, losing the advantages of having access to a credit. This is a problem that seems to have no end... 
I will be cautious in my answer. I think there are few people in Portugal who have a stable job who don’t have a housing solution at their disposal. First, because the rental market has increased, it is not that the rental market is cheap, but increasing it widens the spectrum of possibilities.And at a time when people may want less loss of mobility this can be an important point. The second point is that we have to find the right balance between what are the capacities that people have in terms of their effort rate and what they should assume in relation to their housing responsibilities.Buying a house is especially difficult in the initial phase, because normally the appreciation of the house is worthwhile in relation to the interest rate you pay, in relation to the instalments you pay, and the amortization you can get. Portuguese banks have a technique of amortising from the very first moment, which basically means that people reduce their debt when the house doesn’t lose its value. On the contrary, the house normally appreciates in value, which technically means that, strictly speaking, people are saving. They have to know how much they can save. And then the question is whether it’s worth being more cautious with savings, or whether it’s worth having an extra room. So, I’m cautious in saying all this. Because sometimes, in the quest to have a better house, a better located house, with better conditions, people spend a little more than what their needs are. But does this keep young people away from the city centre, for example? Of course, it does. If we want young people in the city centre, we have to create incentive policies to make this happen. With controlled sales, with municipal intervention in this sense, which can be done, has always been done, in a more or less selective way, in a reasonably decentralised way, because, with all due respect, I can’t find any foreigner, certainly in Portugal, who wants to live in a place where there are no young people. 
Now, to solve the housing problem, as it exists, there obviously has to be some public subsidisation in social situations that need support and the banks must be careful to offer the most suitable conditions. The quality that we offer people in terms of housing must be combined with these precautions. Because, you see, when I say that your effort rate is the central element for buying a house, I am saying that there is a portion of your income that will be consumed in investment, because the house is a consumption of investment, because you are investing in savings and you are investing in utility. And so, obviously, it represents a certain sacrifice. Now, the worst thing we can do is to give ourselves up to the three worries, which usually the beginning of life can create: illness, unemployment and divorce, which are the three elements that clearly create a default on mortgage loans. So, it’s more useful for banks to be cautious at the outset, to be give more advice and be less aggressive. 

«My great pride is my employees, curiously, it is the most secret pride I have» 
The major metropolises, such as Lisbon and the surrounding areas, are starting to fill up. Is there a way to make Portugal’s inland areas attractive? 
Yes, the country is leant towards the water, ‘coastalising’, this is undeniable, both from the point of view of the construction of the greater city areas, whether the area of Greater Oporto or that of Lisbon. And if we expand these areas to make Greater Oporto-Braga, and Greater Lisbon-Setúbal, we have 80% of the population centred in these two points and, therefore, this ‘coastalisation’ of the country is still, in my opinion, the remnant of our Atlantic concept of life. For years we had adevelopment process of the Atlantic, we had eight centuries of history centred on the Atlanticism of our concept of development. The Terreiro do Paço and our ministries face the river, not the country. The concept is from the late 18th century, not from today. Portugal made a choice many years ago to be a European country, in a European country the borders are on the Spanish side. So, we had to turn the country a little bit inside out and we didn’t have that country inside out because the country is coastalised, the roads are on the coast, the metros are on the coast, the industrial activities are on the coast. We created all the conditions for the coastalisation of the country. I think it will be a very slow process, but an important process of giving the interior the mobility and usefulness it can have for harmonious development. I am not saying that harmonious development is made because of a paradigm that is one of ‘inlandation’. I do not agree with it, because people choose the places where they live. So, that idea of saying that we are all going to inland areas because it is beautiful does not seem to me the best in the world. I believe very much in my country, I believe that it will have another eight centuries of history, now more turned towards Europe. And if it is facing Europe, this concept will require a very specific development of these connections to inland areas through support models of clustering. That is, we will have to find in our poles of attraction within inland areas, which have had the same capacity of attraction as other places have had. It will force industrial parks to be in  the  right place and not in other places, they cannot be totally dispersed. Force employment and the universities that are created to have their own local development vocations. Évora, Vila Real or Viseu are three great examples where university structures have proved particularly relevant in creating skills and local development. The fundamental thing is not to duplicate structures, but to strengthen structures. I think that this will happen naturally, in market conditions, but we know that in these things the market always has to be helped a little. I have been more of an advocate of the market working on its own, but from time to time it has to have a little help, and if this is a national mission, the mission of Europe, as a concept of seeing a border on the other side, the Spanish side, then, at that time, we should make a significant investment in this sense, especially since, if we stop subsidising the coastline – we are still subsidising the coastline –, people will also be more inclined to find other balances in terms of the country. Now, this is a task that will take several generations and therefore we must plan it using that time, with that patience and with that tolerance, because a country that lived off the sea to become a country that will live off a continent is a strategic change that will take several generations.
T. Filomena Abreu
P. Nuno Almendra
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