The non-performing loans (NPL) ratio is back to its lowest level since November 2008. It is now at a level similar to that at the end of 1980, when the BdE’s historical series began.

The NPL ratio of Spanish banks stood at 3.30% at the end of February, slightly below the 3.33% recorded in January, according to preliminary data published by the Bank of Spain.

This brings the NPL ratio back to its lowest level since November 2008, when it stood at 3.21%, after rising to 3.33% in January. It is also 30 basis points lower than the ratio recorded in February 2024, when it stood at 3.62%. The current level is similar to that recorded at the end of 1980, when the Financial Supervisory Authority’s historical series began.

In terms of the volume of NPL, they fell by 364 million euros in February to 38,995 million euros, while the year-on-year reduction was 3,258 million euros.

Moreover, the reduction in the NPL ratio was also supported by an increase in the loan portfolio: at the end of February the stock stood at 1,183 billion euros, an increase of some 1,560 million euros compared with January. On the other hand, compared with February 2024, the volume of bank loans had increased by some 16.6 billion euro.

The data broken down by type of institution show that the ratio of doubtful assets of all deposit-taking institutions (banks, savings banks and cooperative societies) ended February at 3.21%, four basis points lower than in the previous month and 29 basis points lower than in the same period of 2024.

In absolute terms, this type of institution recorded a decrease of 343 million euro in its doubtful assets portfolio to 36,325 million euro. Compared with February 2024, the figure is around 2,922 million lower.

The NPL ratio of credit institutions increased slightly to 5.86%, two basis points more than in January. On a year-on-year basis, it fell by 73 basis points.

The volume of doubtful loans of this type of institution at the end of February was 2,492 million euro, eight million less than the monthly variation, while the doubtful balance was reduced by 328 million euro compared to the same month of the previous year.

Finally, according to the Bank of Spain, provisions for all credit institutions amounted to 28,828 million, 128 million less than in January, while the year-on-year variation showed a reduction of 1,203 million.

Original Story: Idealista News | Author: Europa Press / Ana P.Alarcos
Edition and translation: Prime Yield