Spanish banks' bad loan ratio hits record high in September

19.11.2013 - 08:03

Spanish banks' bad loan ratio hits record high in September 
2013-11-18 23:50:43  

     MADRID, Nov 18 (Xinhua) -- Spain's non-performing loan rate rose to 12.67 percent in September, the highest level in more than 50 years, the Bank of Spain reported on Monday.

     Loans that fell into arrears in the Spanish banking system increased by 0.55 percent on a monthly basis from 180.673 billion euros (244.144 billion U.S. dollars) in August to 187.830 billion euros in September.

     In annual terms, bad loans rose from 182.226 euros in September 2012 to the 187.830 billion euros in September 2013, said the Bank of Spain.

     The Bank reported that Spain's total credit portfolio decreased by 8.930 billion euros between August and September to 1.5 trillion euros, while emphasizing that the total credit portfolio fell by 12.94 percent in annual terms as it totaled 1.701 trillion euros in September 2012.

     Spanish banks non-performing loan rate had decreased in December 2012 and February 2012 due to transfers made by Spanish banks to the Spanish "bad bank" (SAREB), which helped reduce toxic assets from Spain's troubled entities.

     After that, Spain's bad loan ratio has been increasing for seven consecutive months and experts believe it will continue to grow as unemployment is very high and households and small companies struggle with debts.

     Experts believe that although Spanish economy has grown by 0.1 percent in the third quarter of the year, its impact on unemployment will not be seen in the short run.  (1 euro=1.35 U.S. dollars)  Enditem