Bank NPLs fall to 3.88% in June, at lowest level since 2008

Non-performing loans (NPL) granted by all credit institutions in Spain to companies and individuals fell in June to 3.88%, marking a low since December 2008.

According to provisional data from the Bank of Spain, this is the first month in which the NPL ratio fell below 4% since January 2009.

The June figure is 30 basis points lower than in May (4.18%) and 52 basis points below the NPL ratio of a year ago, which stood at 4.4%.

The reduction in the private sector NPL ratio reflects both an increase in credit granted and a decrease in the volume of NPL.

Specifically, credit to the resident private sector increased by €12.44 billion in June to €1.234 trillion, while the total volume of non-performing loans fell by €3.148 billion to €47.916 billion (the lowest figure since August 2008).

Compared with June 2021, total lending increased by €2.075 billion and the doubtful balance decreased by €6.302 billion.

The figures include the methodological change in the classification of Financial Credit Establishments (EFCs), which since January 2014 are no longer considered within the category of credit institutions. Excluding the change, the NPL ratio would stand at 3.98%, since the credit balance was €1.2 trillion in June, when excluding the credit of CFCs.

The data broken down by type of institution show that the doubtful assets ratio of all deposit institutions (banks, savings banks and cooperatives) closed June at 3.8%, compared with 4.08% in May and 4.34% a year earlier.

The NPL ratio of financial credit institutions stood at 6.22% in the sixth month of the year, down from 7.15% in the previous month and 6.51% in June 2021.

According to data from the Bank of Spain, the provisions of all credit institutions fell to €33.358 billion euros in June, down €2.033 billion euros in the month and €6.310 billion euros in the year.

Original Story: Estrategias de Inversion | Europa Press 
Photo: Photo by Victor Iglesias from FreeImages
Edition & Translation: Prime Yield