18/03/2014 – ExpansionPro
“The worst thing to do is to pretend the problem does not exist” – said the chairman of the ECB, Mario Draghi, to justify the scrutiny the new distress test is being charged with. (…)
The so-called Comprehensive Assessment “is going to deal with delinquency and other weak points of banks” explained Draghi at a recent press conference. The test will reveal whether or not the measures undertaken against the Spanish banking deterioration have been efficient enough, as the entities and authorities claim.
Bank of America Merrill Lynch (BofAML) had examined books of Spanish listed banks to provide an image of their goodness, before the AQR test began in December 2013. According to its calculations, refinancing and restructuring have gone up by €5.000 million since June 2012 to €140.000 million at the end of 2013. Half of them are unpaid loans, out of which 20% have been assigned as substandard and 30% as normal.
Mean coverage shows 24% for the refinanced and restructured credits altogether, that means a 41% coverage for the delinquent and 16% for those in risk of unpayment. (…).
When it comes to the entities, Santander leads in the ranking with €31.898 million, followed by Caixabank (€25.300 million), then Bankia (€24.904 million), BBVA (€24.800 million), Sabadell (€18.082 million) and Popular (€14.996 million) (…).
In December 2013, the credit delinquency in Spain was equal to €197.000 million, setting the record high default at 13.6%.
Original article: ExpansiónPro (A. Crespo, Lunes 17 de Marzo 2014, pp 16)
Translation: AURA REE