Bank of Spain: Late Payment Will Cross 15% This Year

The Bank of Spain, led by Luis María Linde, preps for the approaching supervision of the European Central Bank, called the Asset Quality Review. (…). In spite of that, his team continues to warn about possible risks in short and medium term, and one of the trouble is the growing number of unpaid credits. (…).

According to the data gathered in the sector and by the Bank of Spain during this year, the problematic aseets will continue to be a  nightmare. They estimate that their number will exceed the 15% rate – the percentage unimaginable just a year ago. However, it does not include the new refinancing undertaking by banks this year that, in fact, could give a total of 20%. Other sources (…) talk about a 14,3% non-payment rate for this year and predict a decrease to 13,5%.

Luis María Linde calls on better unpaid credits´management (…) as the Spanish economy is not ready for a flood of such credits yet. And, according to him, the recovery will not come before 2015 (…). The dramatic rise in non-payments shall be assigned to the economy pace, unemployment and the break in credits.

In reference to the last data available (November 2013), the rate of unpaid credits rose by 13,08%, juxtaposed with 12,99% in October and 11,37% a year before. This is its fifth consecutive maximum score in last 50 years. In December the rate is expected to be crushing. (…).

The banks, savings banks, cooperatives and financial establishments closed November with 192.504 million Euros in unpaid credits. (…).

Original article: Cinco Días (Angeles Gonzalo Alconada)

Translation: AURA REE

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