Portugal to hike CGD's capital by 1 bln euros - PM
LISBON, Dec 17 (Reuters) - The Portuguese government has decide to hike state-owned bank Caixa Geral de Depositos' CGDES.UL (CGD) capital by 1 billion euros to strengthen its lending capacity, Prime Minister Jose Socrates said in parliament on Wednesday.
Socrates said the government's top priority is to stabilize the Portuguese financial markets so companies can obtain credit to finance their investments and maintain their activity levels in the current economic crisis.
"I can announce that the State has decided to increase CGD's capital by 1 billion euros, so it can be more capable of lending money to the economy," he added.
Last month, CGD's CEO, Fernando Faria de Oliveira, said the bank was mulling a capital hike after injecting over 800 million euros into Banco Portugues de Negocios, a small private bank which was recently nationalised.
CGD's total capital currently stands at 3.5 billion euros, and its core tier I solvency ratio was 6.6 percent as of September.
In November, parliament approved a 4 billion euro credit line for Portuguese banks to strengthen the core capital ratios during the international finance crisis.
Portugal's banks have weathered the financial crisis relatively well as they held no toxic U.S. subprime assets and have relatively conservative lending practices. (Reporting by Shrikesh Laxmidas; Editing by Richard Hubbard)
