Covered Bond Markets at a Glance: Portugal

We are releasing a series of reports summarising the covered bond (CB) market in different countries across Europe and providing insight into the key characteristics affecting each market. We're continuing the series with a look at Portugal, one of the top 15 countries in terms of CB market size.

Key highlights include:
-- The aggregate amount of outstanding housing loans increased to EUR 102.4 billion as of Q4 2024 from EUR 98.9 billion the previous year. New origination has consistently increased since 2019, leading the current outstanding volume to a level that is now close to the maximum historical level observed in 2011 of around EUR 114.5 billion.
-- Portuguese CBs, or Obrigações Cobertas, are issued from the balance sheet of the bank that originates the loans, while the cover pool remains with the issuer (originator) but is ring-fenced for CB investors in case of the issuer's insolvency or resolution.
-- The majority of Portuguese CBs are currently backed by residential mortgages. There is one public-sector CB programme, which represents around 1.5% of the market.