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Portuguese central bank governor says lenders in critical need of capital boosts

Banco de Portugal Governor Carlos Costa said localbanks are in "critical need" of additional capital and would have torework their business model to boost profitability amid the low interest rate environment,Reuters reported Oct. 3.

At a conference in Lisbon, Costa said anyefforts to deal with Portuguese banks' stock of nonperforming loans will eataway at capital and that a capital boost would enable them to alter theirbusiness models.

Costa also said stable deposits in banksindicate sufficient confidence in the banking sector in spite of two state bankrescues in 2014 and2015, Reuters noted.