LISBON, Portugal
Two Portuguese banks have agreed to bolster their finances despite withstanding European stress tests, the Bank of Portugal said Friday.
The central bank said all four Portuguese banks evaluated in the simulation passed the tests. They account for roughly 74 percent of the country's banking system.
However, Banco Comercial Portugues, the country's largest listed bank, and Espirito Santo Financial Group have undertaken to strengthen their balance sheets within three months, Banco de Portugal governor Carlos Costa said in a statement.
To pass the tests, banks had to show they can keep a reserve cushion of high-quality capital, called Core Tier 1 capital, of at least 5 percent of their loans and bond and securities holdings.
BCP's was 5.4 percent and ESFG's was 5.8 percent. Costa said they intended to raise their capital above 6 percent to provide greater financial security, but he did not say how much money they needed to raise.
State-owned Caixa Geral de Depositos recorded 6.2 percent and Banco Portugues do Investimento's was 6.9 percent.
Debt-heavy Portugal took a euro78 billion ($110 billion) bailout earlier this year.
It fell into a double-dip recession last year and its economy is expected to contract 4 percent through 2013.
Article Source KBG Test Blog (http://rc.kbg.me)
