Spain's central bank Friday said bad debt at the country's commercial banks soared in April to the worst level in 16 years, a sign that a three-year property bust that's hit developers and households is hurting the financial sector even as Spanish economic growth recovers modestly.
As a percentage of total credit, Spanish non-performing loans rose in April to 6.4%, the highest reading since June 1995, from 6.1% in March.
The increase came even as total loans dropped to €1.813 trillion ($2.58 trillion) the lowest level since mid-2008. This is because non-performing loans jumped 3.5% in April from March to €115.4 billion, the highest mark ever and 10 times as large than it was at the height of the property bubble in 2007.
Still, Emilio Botin, chairman of Banco Santander SA and one of Spain's most influential bankers, said Friday that non-performing loan ratios are close to peaking, and margins are improving across the industry after they dropped in recent quarters. Mr. Botin made the remark at the bank's annual general meeting in Santander in northern Spain.
The data come amid indications that sliding property prices in the euro zone's fourth-largest economy will remain a problem for some time.
Earlier this week, the country's National Statistics Institute said the decline in house prices accelerated again in the first quarter, after the government eliminated generalized tax incentives for home purchases.
First-quarter housing prices fell at a 3.5% quarterly rate and a 4.1% annual rate. That was the fastest rate of annual decline since the fourth quarter of 2009.
Falling property prices and a rise in foreclosures have already left some of the weakest savings banks, or "cajas," in need of cash. The Spanish government is now preparing to inject as much as over €7 billion in several cajas that have requested state aid due to their inability to raise fresh funds in the international market.
That number may increase if other cajas that plan to list shares over the summer are forced to delay such plans due to poor market conditions after weeks of stock-market losses.
You Might Also Like :
0 comments:
Post a Comment