The Bank of Spain has confirmed that non-performing loans (NPLs) fell by €291 million in a single month, bringing the total to €40.163 billion.

The NPL ratio of Spanish banks continued to fall in October to 3.41%, two tenths less than in September and almost two points lower than a year ago, when it stood at 3.60%, the lowest level since the end of 2008. In total, the volume of doubtful loans reached 40.163 billion euros, 291 million euros less than the previous month and a reduction of 2.226 billion compared with October 2023, according to provisional data published by the Bank of Spain.

The main reason for this decline is the renewed fall in NPLs – the aforementioned 291 million – which allowed the NPL ratio to fall despite the credit portfolio falling to 1.177 billion euros, compared with 1.179 billion euros at the end of September. However, the loan book increased by €1 billion year-on-year.

The supervisor also published the aggregate NPLs of banks, savings banks and cooperatives (rural banks) on the one hand and consumer finance companies on the other. The NPL ratio of banks, savings banks and cooperatives fell from 3.32% in September to 3.30% in October, also the lowest rate since December 2008, after the NPL balance fell by 309 million to 37.111 billion euros.

October’s NPL ratio of 3.30% is also lower than the 3.48% of the same month in 2008, after the NPL balance fell by €2.127 billion since then.

Financial institutions saw their NPL ratio rise to 6.68% in October, some 20 basis points higher than in September. Compared with October 2023, however, it fell by 25 basis points. In absolute terms, the volume of doubtful loans of this type of institution stood at EUR 2.880 billion at the end of October, 19 million more than in September. Compared with the same month of the previous year, the doubtful balance was 94 million euro lower.

Original Story: La Razón | Author: Javier de Antonio
Edition and translation: Prime Yield