LISBON, May 6 (Reuters) - Portugal’s banks had capital ratios well above the minimum 10 percent required by the country’s monetary authority, and that solvency improved consistently under an international bailout, the Bank of Portugal said on Tuesday.
It said in a report the aggregated core Tier 1 capital ratio in the sector rose to 12.3 percent last year from 11.5 percent in 2012. That far exceeded the 8.1 percent registered in 2010, before Lisbon resorted to the bailout that is ending this month.
The monetary authority said it had adopted a “more intrusive” model of bank supervision to preserve adequate capital ratios, which included instructing the banks to sell assets, increase capital or limit dividend distribution.
Most leading Portuguese banks had to take pricey state loans from the bailout at the height of the country’s debt crisis in 2012 to meet the European solvency criteria and even tougher goals set by the Bank of Portugal. They have recently started to repay those loans.
The European Central Bank and the European Banking Authority will conduct new tests across the European Union to see if lenders could survive a crisis without needing taxpayer-funded bailouts.
Portuguese bankers have said the country’s banks are well-prepared for such tests after meeting the goals set by Portugal’s own rescue programme.
Reporting By Andrei Khalip; Editing by Larry King