Tag: savings banks

Bank Of Spain: Default Rate Falls To 9.84% In May

19 July 2016 – Expansión

The default rate of loans granted by banks, savings banks and cooperatives to individuals and companies decreased to 9.84% in May, returning to a level not seen since July 2012, when it amounted to 9.86%, according to provisional data published on Monday by the Bank of Spain.

This figure includes a methodological change in the classification of Lending Institutions (Establecimientos Financieros de Crédito or EFCs), which are no longer considered within the same category as credit institutions.

The total doubtful debt figure fell to €126,152 million in May, down by €1,583 million from the previous month. In one year, the volume of doubtful loans has decreased by €27,999 million, equivalent to 18.16%.

In this way, the banks’ default rate has decreased by 3.76 percentage points with respect to the historical maximum recorded in December 2013, when it stood at 13.6%.

The decrease in the default rate has come about, in part, thanks to the continuation of the decline in the overall credit balance in the sector in May. Specifically, total loans decreased by €76,786 million, or 0.52%, to €1,281 billion. In YoY terms, overall credit has decreased by 5.06%.

If we exclude the methodological data, the NPL ratio stands at 10.04%, given that the loan balance in this scenario decreases to €1,256 billion.

In line with default rate, financial institutions have cut their provisions by €762 million with respect to the previous month, down to €74,664 million. A year ago, this “buffer” amounted to €91,836 million.

Original story: Expansión

Translation: Carmel Drake

Bank Of Spain: Default Rate Fell To 10.2% In 2015

22 February 2016 – Cinco Días

The default rate of loans granted by banks, savings banks, credit cooperatives and other financial entities operating in Spain ended last year with another decrease, taking it down to 10.12%, its lowest level since July 2012, compared with 10.35% in November and 12.51% at the end of 2014.

According to the provisional data published on Thursday by the Bank of Spain, this latest decrease in the default rate comes after the cumulative unpaid loan balance in the sector decreased by more than €4,000 million (in December), to €134,327 million, in line with the drop in the total loan balance granted by all of these institutions, which decreased slightly to €1,327 billion, from €1,342 billion a month earlier.

The loan portfolio held by Spain’s financial sector has decreased by just over €53,000 million since the end of 2014, from €1,380 billion, as a result of the deleveraging performed by families and companies alike.

Meanwhile, doubtful debts have recorded a dramatic cut over the last 12 months, falling by €38,276 million from their balance at the end of 2014 (€172,603 million).

Moreover, the aggregate arrears recorded by banks, savings banks and cooperatives, excluding credit institutions (EFCs) also improved at the end of 2015, down to 10.20%, from 10.40% in November and 12.61% in December 2014.

In this case, the balance of doubtful debts also decreased to €1,274 billion, from €1,289 billion a month earlier.

In the case of credit institutions (EFCs), the percentage of bad debts decreased to 7.07%, its lowest level for seven years, since February 2009, after it had remained at 8.69% for three consecutive months.

The loan portfolio of these entities, whose main business is the financing of large consumer goods, such as cars, furniture, electronic goods and appliances, continued to grow, in line with the trend during the year, to reach €39,859 million.

By contrast, unpaid debts decreased to €2,818 million, down from €2,925 million, which allowed the decrease in the default rate.

Original story: Cinco Días

Translation: Carmel Drake

Real Estate Debt Decreases To €41,000M

21 December 2015 – El Economista

The clean up of the financial institutions and the reactivation of the economy are leading to marked decreases in the banks’ real estate arrears. At the end of September, loans granted to property developers had decreased to €41,621 million, a figure that has not been seen since the middle of 2010, when the process to restructure the sector began with the merger of the majority of the saving banks.

In just nine months, the volume of insolvencies relating to property has reduced by almost €13,000 million and the default rate has fallen to 30.6%.

Some of the decrease is due to the sale of unpaid loans that several entities have been carrying out to reduce their non-performing assets. These portfolios have been acquired by investment funds with significant discounts on their nominal values, with the hope of recovering the money and, thus, generating sizeable profits. Another factor that has reduced the amount of property developer debt is the exchange of debt for homes and land by the banks to lighten customer charges and to collect a portion of the loans granted.

Since the outbreak of the crisis, real estate financing has been weighing down on the Spanish financial sector. The number of insolvencies peaked in 2013, at €70,000 million, excluding the volume of loans transferred to Sareb by the entities that received state aid.

According to the data published on Friday, another one of the sectors hardest hit by the crisis, construction, has also been experiencing a significant decrease in its defaulting customers. After decreasing by €3,000 million this year, they now amount to €13,300 million, also returning to 2010 levels, and with a default rate of less than 30%.

The decrease in the default rate is happening in all of the production sectors, as well as in the mortgage sector. As a result, the total volume of unpaid loans being financed by the banks, savings banks and credit cooperatives decreased to €136,000 million in October, a volume similar to that recorded at the end of 2011. In nine months, this amount has decreased by €31,000 million. The default rate of the system as a whole has reduced to 10.6%, its lowest level since 2013, just after the European bailout.

The volume of loans granted by the banks, savings banks and credit cooperatives decreased by 3.5% between October 2014 and the same month this year, according to data published by the Bank of Spain.

The volume of financing granted to companies and families increased to just over €1.2 billion.

Original story: El Economista (by Fernando Tadeo)

Translation: Carmel Drake

The Banks’ Average Default Ratio Drops To 10.66% In Sept

19 November 2015 – Expansión

Improving trend / The banks’ average default ratio dropped to 10.66% in September, its lowest level since 2013. Bankinter has the lowest default rate (4.35%).

The default rate of Spain’s banks continues to fall, mainly thanks to a decrease in the number of loans going into default, an increase in recoveries and sales of non-performing portfolios.

The latest statistics, as at September, show that the default ratio amounted to 10.66%, its lowest level since March 2013. Moreover, there was a small month-on-month recovery in total lending, which boosted the trend.

The decrease is the result of two factors, which are pushing in the same direction: a decrease in doubtful debts and a slight recovery in overall lending. Doubtful loans decreased by just over €3,000 million in September, to amount to €141,267 million. This represents a YoY decrease of 21%. In parallel, loans granted by banks, savings banks and other financial entities increased by €7,529 million during the month, to €1.325 billion, which led to an almost 1 basis point reduction in the YoY rate of decline, to 3.29%.

This trend is a reflection of what is happening in the vast majority of entities. But, clearly, the situation is different for each bank.

Based on the data as at September for the country’s main financial institutions, eight had a default ratio below the average rate and four had a default ratio that exceeded it.

Bankinter stands out as the bank with the lowest default ratio in Spain, with a difference of 6.3 percentage points compared with the average for the sector (10.66%).

Thanks to its prudent strategy in the real estate sector during the boom years, the entity led by María Dolores Dancausa maintained its position as the bank with the lowest default ratio for the entire duration of the crisis.

CaixaBank is ranked in second place, although it sits a long way behind Bankinter. The Catalan bank had a default ratio of 8.7% in September, having reduced its ratio by almost 2 points in the last year. It is followed by Kutxabank, another entity that has been noted for its robustness, during a period when the vast majority of the savings banks suffered from the ravages of the burst of the RE bubble.

Spain’s two largest banks, Santander and BBVA, have exactly the same default ratio: 9.5%, based on the data supplied by the entities to Expansión. (…). Therefore, both banks have a default rate that is one percentage point below the average ratio for the sector.

Ibercaja Banco, the former Aragonese savings bank, which took control of the Caja3 group, also sits slightly above the average. Finally, Sabadell and Liberbank’s ratios are also above average, although in both cases, the ratios do not include the assets covered by their respective Asset Protection Schemes, granted when they acquired CAM and CCM, respectively.

Original story: Expansión (by Michela Romani)

Translation: Carmel Drake