March 1, 2012 / 9:26 AM / 5 years ago

Portuguese banks took 19 bln eur in LTRO-report

LISBON, March 1 (Reuters) - Portuguese banks grabbed around 19 billion euros at the European Central Bank's second offering of cheap three-year funds, more than the 17 billion borrowed in the first offering in December, the Diario Economico newspaper said on Thursday.

Portuguese banks have long been forced to rely on ECB funding as lenders in the bailed-out nation are largely unable to borrow from banks elsewhere.

The number provided by Diario includes 7 billion euros borrowed by the country's largest listed bank, Millennium bcp , according to a bank spokesman.

"We were able to achieve 7 billion euros in 3-year LTROs, which is higher than the 5 billion we got in December. But we did not increase our exposure to ECB, we just swapped shorter funding for longer," the spokesman told Reuters.

The Diario Economico did not cite its sources, saying the number was based on "information obtained, as well as conservative calculations". It said most of the money was used to roll over central bank loans taken previously, but some institutions also used part to create liquidity cushions.

It said Banco Espirito Santo borrowed 5 billion euros, the same as in December. Third-largest listed Banco BPI grabbed 2 billion euros, also the same amount as in December.

State-run Caixa Geral de Depositos borrowed over 2 billion euros and Santander-Totta, the Portuguese unit of Spain's banking giant Santander, obtained less than 3 billion euros, Diario said. Small bank Montepio took just 350 million euros, down from December's 1 billion.

The country's banks had been shut out of the interbank funding market for over a year, long before Portugal resorted to a 78 billion euro EU/IMF bailout in May 2011, and have since relied on emergency funding provided by the ECB. Their cumulative borrowing stood at 46.48 billion euros in January.

Banks in the euro zone have been growing more distrustful of each other as the common currency area's debt crisis deepens, a logjam the ECB sought to unblock by offering its ultra-cheap 3-year funds. (Reporting By Andrei Khalip)

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