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LISBON, Feb 7 (Reuters) - The fundamentals of the Portuguese banking system will continue to stabilise this year, but profitability will be difficult to improve as credit flow should remain low while massive bad loans remain a concern, Moody's analyst Pepa Mori said on Tuesday.
The ratings agency has a stable outlook for Portuguese banks as a whole, which have been among the most fragile in the euro zone after two bank rescues in 2014 and 2015, for the next 12-18 months.
"Overall, the fundamentals are weak but they are on a stabilizing trend after years of deterioration... Our view is that the trend will continue. That will be the trend for 2017," she told Reuters on the sidelines of a conference in Lisbon. (Reporting By Andrei Khalip and Sergio Goncalves, editing by Axel Bugge)