Portuguese lender's borrowings from an emergency European Central Bank program jumped 23 per cent in April as the country sought a European Union bailout, the Bank of Portugal said.

ECB funding increased to €48 billion from €39 billion in March, the fourth rise in five months, the Lisbon-based Bank of Portugal said on its website today. The figure is still less than August's €49.1 billion peak.

Portugal last week became the third euro-area country after Greece and Ireland to receive a bailout. The country will receive 78 billion euros under the deal with the International Monetary Fund, the ECB and the EU. Central bank president Jean- Claude Trichet told reporters on April 7th the ECB "encouraged" Portugal to seek the rescue, adding that the country's banks needed to reduce their reliance on ECB funding.

Portuguese banks have been relying on financing from the European Central Bank as the government's struggle with its deficit restricted their ability to borrow money from the interbank lending market. Portugal's banks will get about €12 billion in the rescue package.

Banco Espirito Santo SA's chief executive officer, Ricardo Salgado, said last week the lender's reliance on ECB financing increased in the first quarter. The Portuguese lender said this week that it agreed to sell a stake in Brazil's Banco Bradesco SA to bolster capital.

Banco Comercial Portugues SA reduced its ECB borrowings to €14.7 billion at the end of March from €14.9 billion at the end of December, CEO Carlos Santos Ferreira said last month. Portugal's biggest publicly traded bank plans to raise €1.25 billion to bolster capital.

Both Espirito Santo's Salgado and Banco Comercial's Santos Ferreira have said the banks don't intend to use the state aid included in the package. Banco BPI SA, Portugal's fifth biggest bank, had no financing from the ECB in the first quarter.

Bloomberg