Sunday, September 8, 2024

Spanish banks’ default rate rises to 3.6% in May

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MADRID (EFE) – The default rate in Spanish banks rose in May to 3.6%, from 3.59% in April, mainly due to an increase in unpaid loans, which was added to a decrease in the total stock of credits, according to data published on Monday by the Spanish central bank.

Non-performing loans rose by EUR 212 million in May, to EUR 42.353 million, while the credit portfolio fell to EUR 1.174 billion, compared to EUR 1.175 billion at the end of April.

Compared to May 2024, credit delinquency has seen the same development, rising from 3.59% then to 3.6% now, but the balance of doubtful loans has decreased by about 475 million.

In addition to the aggregate data for the sector, the Bank of Spain publishes every month the total defaults of banks, savings banks and cooperatives (rural savings banks), on the one hand, and, on the other hand, consumer finance companies.

Facade of the Bank of Spain and the metro station.
Facade of the Bank of Spain and the metro station. EFE/Emilio Naranjo

The default rate of banks, savings banks and cooperatives rose from 3.47% in April to 3.49% in May, recovering from March levels, after the stock of unpaid debts rose by 170 million to 39,073 million.

On this occasion, the default rate of 3.49% for May is identical to the figure for the same month in 2023, although the stock of outstanding debt has since decreased by about 700 million.

In the case of consumer finance companies, the delinquency rate also increased, from 6.58% in April to 6.64% in May, due to the growth of unpaid loans by 43 million in one month, reaching 3,103 million.

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Compared to the previous year, consumer finance companies witnessed an increase in the delinquency rate of loans granted from 6.58% in May 2024 to 6.64% in the same month of 2024.

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