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Western EuropeApril 3 2017

Portugal’s banks rise from the ashes

Once one of the standard bearers for the travails of the eurozone, Portugal appears to be in the early stages of a recovery, one in which its revitalised banks are playing a leading role – albeit heavily backed by foreign investment. Peter Wise reports.
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Over the next few months, Portuguese banks will complete a transformation that will leave little in the sector as it was before. The change, triggered by the global financial crisis, is affecting ownership, scale, capital strength, business models and international reach. By the start of 2018, lenders are confident they will have emerged from years of heavy losses and deep restructuring in a better position to generate sustained profitability.

Nuno Amado, chief executive of Millennium bcp, describes the changes he has overseen at Portugal’s largest listed bank as a “profound restructuring”. It meant “working hard to strengthen our capital ratios, reduce our non-performing exposures and further improve our efficiency”, he says. “We have repaid our state aid without costing taxpayers a penny and now have capital ratios significantly higher than required by the supervisory authority.”

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