The default rate in banks has decreased for the first time in 17 months thanks to the transfers of the bad bank.

The default rate of the loans granted by Spanish banks dropped in December by 10,44%, a first descent after 17 months of increases and its lowest rate since July 2012, due mainly to the transfer of toxic assets from the financial institutions to the bad bank.

According to the provisional results published by the Bank of Spain this Monday, the credit portfolio of banks, savings banks, credit unions and financial credit establishments reached 1604 billion Euros at the end of December, 4,6% less than in November, a descent caused by the transfer of assets to the bad bank and not by a decrease of the credit flow.

The Bank of Spain indicates that this transfer has caused a reduction of the total balance of doubtful loans (…).

The delay in payment rate continues to be nearly three percentage points over the one reached one year ago, 7,84%.

Although the Bank of Spain does not facilitate figures divided by different types of institutions, it does differentiate between banks, savings banks and credit unions, on one side and financial credit establishments, on the other. These last ones, specialized in consumer credits, has seen its delays in payment rise from 9,29% to 9,71% with a credit portfolio of 38.996 million Euros, 3621 of which were doubtful.

The rest of institutions reduced its delay rate in more than one percentage point, from 11,54% to 10,58%; the credit portfolio dropped by 5%, from 1618 billion Euros in November to 1536 in December.

The doubtful loans were reduced by 13%, down to 162.580 million Euros.


Source: ABC