Spanish banks slightly tightened the criteria for granting loans in the last months of 2021 and this trend seems to have continued at the start of the 2022 financial year, at least for companies, as credit to companies fell by 0.8% month-on-month in January, with 7,669 million euros less.
However, credit granted by financial institutions to companies rose by 1.05% year-on-year, to 931,989 million euros, adding 9,698 million euros as a result of the injection of liquidity measures approved by the government since the start of the pandemic, such as the 140,000 million ICO guarantees to deal with the impact of Covid-19.
Likewise, financing to households and non-profit institutions resident in Spain rose by 1% in January to 700,769 million euros, adding 6,933 million euros in a single year, and managed to hold steady at the start of the year, with just 778 million up (+0.1%) on December, according to data published on Tuesday by the Bank of Spain.
All this after the 2021 financial year closed 2021 with six-year highs in financing to companies (939,658 million euros), while it rose to families per omicron to around 700,000 million euros.
Maintenance of conditions in the first quarter
In the fourth quarter of 2021, the criteria for granting loans would have tightened slightly in Spain across the board, according to the latest bank lending survey of the supervisory body, and the data show that this trend would have continued at the start of 2022, especially for companies.
Banks do not want to make the mistakes of the past and have been gradually tightening the criteria for granting financing, especially in the retail and non-residential real estate sectors, although they have not turned off the tap in these areas, as credit continues to flow but loans are subject to stricter conditions as a precautionary measure to control default.
Looking ahead to the first quarter of 2022, the Spanish institutions surveyed do not expect significant changes in the supply of credit, so they anticipate that lending criteria will remain stable and that demand will grow, albeit at a “very moderate” rate.
Consumer credit falls and mortgages rise
The slight upturn in household credit is due to the increase in mortgage loans, which amounted to 514,738 million euros in January, up 76 million on a monthly basis and 5,289 million on a year-on-year basis (+1). Even so, mortgage credit still represents 73.45% of the total.
Household consumer loans fell by 3.4% month-on-month, with 3,229 million less, to 92,010 million euros, but on a year-on-year basis they rose by 0.5%. This monthly decline may be influenced by the increase in the savings rate, which reached record highs last year, and the pent-up demand that could gradually be uncorked in the coming months. There was also an increase in lending for “other purposes” to 91.237 billion from 87.324 billion in December.
On the other hand, on financing to companies, which leaves behind the maximum levels since 2015 that it had registered months earlier, the decline in loans from credit institutions to companies stands out, as they fell in a single month by 8,288 million euros (-1.7%), to 479,147 million euros, with a year-on-year decrease of 1.2%, as 5,803 million euros less were granted.Debt securities rose 11.2% year-on-year and 0.4% month-on-month to 143.142 billion euros. At the end of the first month of the year, foreign loans had grown by 0.3% year-on-year and were practically unchanged from December, with a total of 309,701 million euros.
Original Story: Economia digital| Sérgio Diago
Photo: Photo by Pierre Amerlynck from FreeImages.com
Translation & Edition: Prime Yield