Own funds are adequate given the current level of balance sheet risk: the Tier 1 capital ratio stood at 9% in 2010 and the core Tier 1 capital ratio at 8.2%. Obviously, the banking system suffered from the impact of the international crisis and the decline in growth.
As expected, between 2007 and 2010, the total ratio of non-performing loans increased from 1.5% to 3.3% and the return on equity decreased from 14.63% in 2007, to 7.37% in 2010, after having dropped to 3.44% in 2008. However, the Portuguese financial system shows some specificities that should be addressed.