Spanish Banks’ NPL Ratio Falls to 12.9% in October

18/12/2014 – Invertia

According to the provisional data published by the Bank of Spain today, the total value of soured loans dropped to 178.38 billion euros, levelling out to June 2013.

The default rate links seven consecutive months of decline, however it is not so visible as the current credit balance shrank by 0.43%. Precisely, the sector’s overall credit registered in October showed by 6.01 billion euros less than in September.

Not taking into account the recent methodological changes, the non-performing loan rate would stand at 13.16%, down from the previous month’s 1.38 billion euros to 1.35 billion.

The default dipped down in December 2012 and February 2013 as a result of accounting changes after the bad bank of Spain received toxic asset transfers from main entites (Bankia, NCG Banco, Catalunya Caixa, Ceiss, BMN and Caja3) in two phases.

The financial entities maintain their provisions, although there have been some cuts in October bringing them down to 105.74 billion euros. In September, it showed an amount of 106.67 billion.

Progressive Fall to 10% Forecasted For 2015

Antonio Marcos, an analyst at XTB, estimates that the rate will sit at 10% in 2015 due to reduction in non-payment and an increase in lending to companies and families.

Original story: Invertia

Translation: AURA REE