LISBON, May 30 (Reuters) - There are signs that a protracted fall in credit to Portuguese companies has stopped, but incentives are still needed to stimulate demand for loans, the Chief Executive Officer (CEO) of Millennium BCP (BCP) said on Thursday.
Nuno Amado, the head of Portugal’s largest listed bank by assets, said that for companies at least, the worst may be over after a sharp drop in credit supply in 2010-2012.
“There seems to be a beginning of stabilisation in company credit portfolios in the first quarter of 2013,” the CEO said at a conference hosted by Reuters and local TSF radio.
He cited recent data as showing that loans to companies in Portugal were at 26.4 billion euros in March, 3.5 billion euros less than a year ago but stable compared to the end of 2012.
He said that both companies and the state must continue their deleveraging efforts to build up the trust in the financial system which has been regained over the last few months.
“The rise in deposits despite the bailout programme shows a good level of trust in the Portuguese financial system, one that contrasts with others in the euro zone,” Amado said.
Portugal is navigating through its third year of recession after enacting painful tax hikes and spending cuts and it hopes to exit its 78-billion euro EU/IMF bailout programme within schedule by mid-2014. (Reporting by Sergio Goncalves and Daniel Alvarenga; editing by Barry Moody)