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Portugal to pump €6.65 billion into three banks, passes bailout review

One bank – BPI – has confirmed it is to receive €1.5 billion in capital injections.

Updated 11.59am

PORTUGAL IS TO inject €6.65 billion into three of its banks, a move announced as the country passes its fourth review of its EU/IMF bailout programme.

BPI earlier confirmed that the State will take €1.5 billion worth of convertible bonds in order to reinforce the bank’s core capital holdings.

BCP and state-owned CGD will also require funding to meet the capital criteria of the European Banking Authority. According to a statement by the Finance Ministry, BCP will receive €3.5 billion to strengthen its capital reserves, while CGD will need €1.65 billion.

The move comes as Portugal passed its fourth review of its economic programme. The European Commission, European Central Bank and International Monetary Fund said that the programme remains on track amidst continuing challenges.

The positive grade will allow for the release of the next €4.1 billion tranche in July. Altogether, Portugal has been granted €78 billion in loans from its international partners.

Last year, Portugal followed Greece and Ireland into an economic programme as State debt piles became unsustainable as growth stagnated and unemployment levels remain elevated.

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