May mania as Spanish banks' bad loans rise
Source: AFP |
July 19, 2013, Friday
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THE weight of bad loans held by Spain's banks grew in May, the Bank of Spain said yesterday, a sign of the difficulties facing the bailed-out banking sector.
Bad loans rose to 170.2 billion euros (US$223.6 billion), or 11.21 percent of all loans, in May from 167.1 billion euros, or 10.87 percent of all credits, in April, it said.
Bad loans began to rise at all Spanish banks after the collapse of a decade-long property boom in 2008. The bad loan ratio hit a record-high 11.23 percent of all credits in November 2012.
The International Monetary Fund warned on Monday that Spain's financial sector still faces risks even though it has been strengthened since the government last year set up a "bad bank" called Sareb charged with taking on the stricken banks' toxic assets.
"Actions to recapitalize parts of the banking sector and the asset transfers to Sareb have provided an important boost to the system's liquidity and solvency," it said in a report.
"Notwithstanding this progress, risks to the economy and hence to the financial sector remain elevated."
Last year, the eurozone agreed to finance a rescue of Spain's banks and Spain has so far withdrawn 41.3 billion euros from the rescue loan to recapitalize its banks.
Bad loans rose to 170.2 billion euros (US$223.6 billion), or 11.21 percent of all loans, in May from 167.1 billion euros, or 10.87 percent of all credits, in April, it said.
Bad loans began to rise at all Spanish banks after the collapse of a decade-long property boom in 2008. The bad loan ratio hit a record-high 11.23 percent of all credits in November 2012.
The International Monetary Fund warned on Monday that Spain's financial sector still faces risks even though it has been strengthened since the government last year set up a "bad bank" called Sareb charged with taking on the stricken banks' toxic assets.
"Actions to recapitalize parts of the banking sector and the asset transfers to Sareb have provided an important boost to the system's liquidity and solvency," it said in a report.
"Notwithstanding this progress, risks to the economy and hence to the financial sector remain elevated."
Last year, the eurozone agreed to finance a rescue of Spain's banks and Spain has so far withdrawn 41.3 billion euros from the rescue loan to recapitalize its banks.
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