According to the Bank of Spain’s Spring 2025 Stability Report, credit institutions (EFCs) slightly reduced their market share in 2024 compared to 2023, despite the expansion of consumer credit.

In 2024, the share of consumer credit provided by these institutions and banks combined was 20.1%, which is half a percentage point lower than in 2023.

The Bank of Spain notes that this decline contrasts with the general upward trend of the last decade, occurring amid an expansion of consumer credit across the entire system. It highlights that these loans grew by 7.3% in the banking sector in 2024, but by only 4.4% in finance companies.

‘This difference in growth between the two groups in 2024 is partly due to some banks absorbing the consumer credit activity previously provided by financial credit institutions that consolidated with them,’ the report notes. A similar effect occurred in 2020, a year impacted by the Covid-19 crisis.

Using data from 2025, the Bank of Spain reports that the downward trend in the share of finance companies continued during the first quarter, standing at 19.2%.

Evolution of non-performing loans

The Bank of Spain also addresses the credit quality of this segment. It notes that the ratio of non-performing loans for finance companies rose slightly to 3.5% in 2024, an increase of 0.1 percentage points. However, this remained below the ratio of 4.3% for banks in the same product segment.

The ratio of consumer loans from financial institutions under special surveillance fell by one percentage point last year, standing at 6.2%, while for banks as a whole it stood at 7.3%.

Finally, in the first quarter of 2025, there was a slight deterioration in credit quality, with increases in the ratios of doubtful loans (up 0.4 points to 3.9%) and special surveillance loans (up 0.5 points to 6.7%) in this credit segment.

Original Story: Valencia Plaza
Edition: Prime Yield
Image by Roman Ivanyshyn from Pixabay