1 Min Read
LISBON, Oct 3 (Reuters) - Portuguese banks face a critical need of additional capital and have to alter their business model to become more profitable in a low interest rate environment, Bank of Portugal Governor Carlos Costa said on Monday.
"Banks are confronted with non-performing loans that will consume capital to get sorted out ... Banks are in critical need of capital increases to switch to a new business model," he told a conference in Lisbon.
He said, however, that the stability of deposits showed sufficient confidence in the country's banking system despite two bank rescues in 2014 and 2015 by the state.
Reporting By Daniel Alvarenga, writing by Andrei Khalip