Portugal to inject up to €6.65B into three banks

The Portuguese government said Monday it will inject up to EUR6.65 billion into three of its largest lenders in an attempt to strengthen a banking sector coping with fast-rising loan-losses after the country was bailed out less than a year ago In a regulatory filing, the Portuguese finance ministry said it will inject EUR1.65 billion into state-controlled bank Caixa Geral de Depositos, up to EUR3.5 billion into Banco Comercial Portugues SA (BCP.LB), and EUR1.5 billion into Banco BPI SA
The bulk of the money for the recapitalization, some EUR5 billion, comes from the Bank Solvency Support Facility, a bank bailout mechanism set up as part of Portugal's EUR78 billion bailout package
The state will receive contingent convertible bonds in exchange for the injections into BCP and BPI, the two banks said
BCP later plans to raise EUR500 million through a capital increase while BPI plans to raise EUR200 million
The proceeds from these capital increases will be used to pay back part of the State aid
Both BCP and BPI had already said they planned to ask for money from the bailout fund
The Finance ministry added that it stands ready to help out any other bank that needs more capital