In the case of individuals it said there had been “strong growth” in consumer credit and new mortgage operations showing there were fewer restrictions on granting credit.
The central bank said the Portuguese banking system continued to have “vulnerabilities” with levels of return remaining low despite having increased somewhat, the level of non-performing loans was still “significant” and the high exposure to government debt and real-estate made the sector particularly sensitive to unfavourable changes in the prices of these assets.
“The economic recovery and low interest rates mitigated some of the risks associated with the short-term loans”, it added.
Even so, the Bank of Portugal stressed the progress that had been made in reducing the borrowing ratios and positive developments in the banking sector that had made the Portug-uese economy more resilie-nt to risks to financial stability.