LISBON Oct 3 Portuguese banks face a critical
need of additional capital and have to alter their business
model to become more profitable in a low interest rate
environment, Bank of Portugal Governor Carlos Costa said on
"Banks are confronted with non-performing loans that will
consume capital to get sorted out ... Banks are in critical need
of capital increases to switch to a new business model," he told
a conference in Lisbon.
He said, however, that the stability of deposits showed
sufficient confidence in the country's banking system despite
two bank rescues in 2014 and 2015 by the state.
(Reporting By Daniel Alvarenga, writing by Andrei Khalip)