The non-performing loan (NPL) ratio of Spanish banks fell below 3% in June for the first time since October 2008, according to historical data published by the Bank of Spain.

Furthermore, the NPL rate in June decreased compared to 3.11% in May and 3.43% in the same month of 2024.

In terms of loan volume, the stock of doubtful loans amounted to €36.291 billion, representing a reduction of €955 million compared to May and €4.599 billion compared to June 2024. This also marked the lowest amount of non-performing loans since June 2008.

The decline in the NPL ratio is also explained by an increase in the total volume of credit granted, which reached €1.220 trillion in June. This implies a rise of €23.113 billion compared to May and €27.848 billion compared to June 2024.

On the other hand, data broken down by type of institution show that the doubtful loan ratio for all deposit-taking institutions (banks, savings banks, and cooperatives) ended June at 2.89%, two basis points lower than in the previous month and 43 basis points lower than in the same period of 2024.

In absolute terms, these institutions recorded a decrease of €788 million in their doubtful loan portfolio, down to €33.703 billion. Compared to June 2024, this figure is about €4.129 billion lower.

Meanwhile, credit financial institutions saw their delinquency rate fall to 5.42%, 61 basis points lower than in May, although the year-on-year reduction is one percentage point.

Additionally, the volume of doubtful loans for these institutions stood at €2.404 billion at the end of June, €166 million less on a monthly basis. Compared to the same month last year, the doubtful balance decreased by about €479 million.

Finally, according to the Bank of Spain, total credit institutions’ provisions stood at €27.654 billion, a reduction of €330 million compared to May, while the year-on-year change showed a decrease of €1.598 billion.

Original Story: Europa Press
Edition and translation: Prime Yield

The deal, which could be closed for between 100 and 150 million, would be a cut compared to the 200 million asked for two years ago.

KKR is moving forward in the process of divesting Hipoges, its subsidiary specialising in the management of real estate assets in Spain. As reported by Bloomberg, the US fund is in exclusive negotiations with Pollen Street Capital, a British investment firm that also controls the servicer Finsolutia.

The sale process, which was reactivated at the end of 2023 with the mandate granted to Alantra, has entered its final phase. Although KKR’s initial objective was to reach a valuation of around 150 million euros, sources quoted by ElConfidencial suggest that the deal could finally close at around 100 million. In any case, both figures would represent a downward adjustment compared to the 200 million requested in a previous sale attempt that did not materialise.

After that failed attempt, Hipoges explored the possibility of acquiring Servihabitat – Lone Star’s real estate subsidiary -, an operation which also failed to come to fruition.

Hipoges’ situation has been conditioned by the recent transfer of assets from Sareb to Entidad Estatal de Suelo (Sepes), with the aim of allocating them to affordable rentals. This government decision directly affects the servicer, which in 2021 was awarded the management of a portfolio valued at €25 billion from the so-called ‘bad bank’.

In addition to Pollen Street, other firms such as doValue (owner of Altamira), J.C. Flowers (through Pepper Advantage) and Arrow Global Group (through Amitra Capital) have also shown interest in the transaction.

With a portfolio of more than €50 billion under management, Hipoges remains one of the leading real estate and financial asset servicing platforms in Spain.

Original Story: Iberian Property | Author: Alexandre
Edition: Prime Yield

The Bank of Spain has warned investors in the real estate market that the risk of default in the sector has increased.

This Monday, the Bank of Spain issued a statement warning of an increase in the risk of loan default by non-financial companies, largely driven by the construction and real estate sectors, as well as other services.

‘There has been a slight increase in the probability of loan defaults in recent quarters,’ the bank said in its biannual report on the financial situation of households and businesses. The report states that the probability of defaulting on bank debt has risen by 39 basis points since the third quarter of 2023, increasing from 2.14% to 2.5%. However, this figure remains 25 basis points below the 2022 average.

Of these 39 basis points, 31 rose in the fourth quarter of last year, while the remaining eight points rose in the first half of 2025. This trend was observed across companies of all sizes.

Nevertheless, the deterioration in credit quality was somewhat more pronounced among large companies, with a 51-basis-point increase in the probability of default from the third quarter of 2024 to reach 2.03%. This figure is approximately 50 basis points below the average for non-financial companies overall, according to Europa Press.

What has happened?

The recent increase in the probability of corporate default has mainly been driven by growth in the construction and real estate sectors, as well as other services. In fact, the average risk of default in these sectors has increased by 44 and 96 basis points respectively since the third quarter of 2024.

Conversely, credit risk has risen slightly in the trade and hospitality sectors, reaching nine and twelve basis points above the third-quarter 2024 probability of default in the first quarter of 2025.

Nevertheless, the Bank of Spain has warned that the data ‘do not indicate a significant increase in tail risk, as the proportion of credit classified in the highest risk category has remained at levels similar to those in 2022’.

Regarding the increase in risk in the construction and real estate sectors, the agency explained that the deterioration is due to ‘an increase in the risk associated with the credit balance, assuming a constant debt structure and borrower composition’.

Original Story: El Economista
Edition and transalation: Prime Yield

Photo: Jorge Fernández Salas at Unsplash

The volume of non-performing loans (NPL) fell to 37.926 billion, which is 10% less than a year earlier.

According to provisional data published by the Bank of Spain, the Spanish banking sector’s NPL ratio continued to fall in the fourth month of the year, reaching 3.18% — its lowest level since October 2008, when it stood at 2.92%.

This was also a decrease compared to March, when the default rate was 3.21%, and April 2024, when NPL accounted for 3.60% of the credit stock.

The volume of doubtful loans fell to €37.926 billion in April, which is €354 million less than in March and €4.22 billion less than in April 2024.

This decline in NPL is accompanied by an increase in the total amount of loans granted in Spain. During April, the total stock of loans granted was €1.193 trillion, representing an increase of around €2 billion compared to March, and around €22 billion compared to April 2024.

Breaking the data down by type of institution, the NPL ratio for all deposit institutions (banks, savings banks, and cooperatives) was 3.08% in April, which is three basis points lower than the previous month and almost 40 basis points lower than in the same period in 2024.

In absolute terms, this type of institution recorded a €351 million decrease in its NPL portfolio, bringing it to €35.201 billion. Compared to April 2024, this is about €3.702 billion lower.

Meanwhile, credit institutions saw their NPL ratio rise to 5.99%, an increase of 20 basis points compared to March, though the year-on-year reduction remains at over one percentage point.

The volume of NPL for this type of institution was €2.538 billion at the end of April, which is €15 million less than the previous month. Compared to the same month last year, the non-performing balance fell by around €527 million.

Finally, according to data from the Bank of Spain, provisions for all credit institutions totalled €28.548 billion in March, which was a decrease of €37 million compared to the previous month. The year-on-year variation showed a reduction of €1.49 billion.

Original Story: Diário Publico | Author: Europa Press
Edition and translation: Prime Yield

AltamarCAM Partners, through its management company Altamar Private Equity SGIIC, has officially launched and registered with the CNMV its new fund of funds for secondary investments: ACP Secondaries 6 FCR, with a target total committed capital of €1.3 billion. This vehicle is part of the global ACP S6 programme, which will also include parallel vehicles and complementary structures managed or advised by the group.

According to data from Lazard, the global volume of transactions in the secondary market reached $150 billion in 2024 and could reach $200 billion in the next two years. The launch of the new fund comes a few months after Altamar announced, last February, the closing of ACP Secondaries 5, after reaching €1.6 billion in committed capital. The firm is currently among the top 20 secondary fund managers worldwide, in a market dominated by Ardian. Altamar already manages more than €20 billion in assets and has set itself the goal of doubling that figure within five years.

ACP Secondaries 6 is designed to invest predominantly in secondary transactions in private equity funds, selecting mainly international underlying funds — buyouts, growth and venture capital — as well as complementary private assets, including infrastructure and distressed debt.

The fund’s investment strategy is based on three pillars: secondary transactions, co-investments and primary (on and opportunistic basis). Regarding the secondary transactions, the vast majority of investments will be made in the secondary market for private equity fund interests, where Altamar has extensive experience. As for co-investments: up to 20% may be allocated to direct co-investments with other funds or strategic partners. Last, a limited and selective exposure to primary transactions is envisaged.

In terms of geographical scope, ACP Secondaries 6 will take a global approach, with a primary focus on Western Europe, the United States and emerging markets, without setting minimum or maximum limits per region.

The fund may invest up to 100% in other venture capital entities in accordance with Law 22/2014 (LECR) or equivalent foreign entities, while also retaining the possibility of co-investing directly in target companies alongside such entities.

ACP Secondaries 6 also contemplates the creation of parallel vehicles to adapt to the regulatory, tax or structural requirements of different types of investors. All investments will be made under substantially equivalent conditions between the main fund and its associated vehicles.

This new strategy reinforces AltamarCAM’s position as one of the key players in the European secondary fund investment market, combining access to quality opportunities with a focus on global diversification and risk control.

Original Story: Capital Riesgo
Edition and translation: Prime Yield

The combination of interest rates being stuck at zero per cent for years and a credit crunch at some point in the cycle created the ideal conditions for financing and investment outside the banking sector to flourish. In fact, the expansion of the non-banking financial sector has far outpaced the growth of the banking business over the last decade in both Spain and Europe. This has not gone unnoticed by regulators, as the phenomenon poses clear challenges to financial stability.

In Spain, this activity already accounts for 33.8% of the financial system’s total assets, although this figure remains far below the 59.9% represented by the non-banking financial sector in the euro area. According to data from the Bank of Spain, at the end of 2024 the total unconsolidated assets of banks and the non-banking financial sector in the domestic market amounted to €3.09 trillion and €1.58 trillion respectively.

In the euro area as a whole, these figures were €38.56 trillion and €57.49 trillion for the banking and non-banking sectors, respectively. However, what is particularly significant about this phenomenon is the pace at which it is advancing. While total assets managed by banks in Spain grew by almost 10% between 2015 and 2024, those channelled through the non-banking sector increased by around 25% — more than double.

According to the latest Financial Stability Report published by the Bank of Spain, the increase was 30% and 40% respectively over the last decade in the eurozone.

The term ‘non-banking’ encompasses ‘shadow banking’, which is not subject to the strict requirements imposed on financial institutions, as well as a long list of regulated and supervised operators, including insurance companies, pension funds, money market and non-money market funds, credit institutions, securitisation funds, and securities companies and agencies. This also covers the activities of venture capital companies, SOCIMIs, payment institutions, appraisers, and instrumental subsidiaries that issue securities.

In its latest annual report for 2024, the ECB acknowledges that the non-banking sector (IFNB) maintained its resilience to market volatility and supported market financing across all credit risk categories in the euro area. However, the report also notes that ‘vulnerabilities related to exposure concentration, liquidity mismatches, and high leverage in certain areas of the investment fund sector continue to be a cause for concern’.

Among the risks it monitors are sharp changes in valuations, which could lead to sudden fund outflows and margin calls, amplifying adverse market dynamics and causing spillover effects to other parts of the financial system.

According to the Financial Times, EU regulators are planning the first stress test to identify vulnerabilities in the non-bank financial system in the event of a worsening market crisis. This would include private equity firms, hedge funds, money market funds, insurers and pension funds, following a similar exercise carried out by the Bank of England last year.

The aim is to examine how a crisis would spread among the different parts of the financial system, and whether it could magnify the impact rather than absorb it.

Original Story: El Economista | Author: Eva Contreras
Edition and translation: Prime Yield

Banco Santander has completed a new hotel financing deal. The bank has awarded Bank of America a portfolio consisting of eight loans to Spanish hotel establishments with a gross value close to €90 million. These loans were previously affected by collection issues or refinancing within the last year, but are now up to date with payments (a type of asset known as ‘reperforming’ in the jargon).

Other investors, such as Cerberus, Golden Tree and Ben Capital, were interested in the portfolio, dubbed Project Cosmos. These large, unique transactions are priced better than portfolios comprising thousands of borrowers, which typically make up mortgage, consumer credit or corporate and SME portfolios, because investors can perform a more detailed analysis of each borrower.

This transaction is similar to last year’s Zeta portfolio, which was a loan portfolio to the hotel sector with a gross nominal value of almost €300 million. According to El Confidencial, JP Morgan acquired this portfolio for around €200 million. The portfolio comprised financing for six hotel clients, with guarantees on 30 hotels.

Unique loans

The sale of unique and individual loans has become increasingly popular in bank debt divestments as a means of alleviating balance sheet provisions, following the major clean-up that took place in the past with the sale of large portfolios of non-performing assets worth billions of dollars.

Overall, banks have adopted this approach to asset disposal to keep default rates under control and transfer the management of these assets to specialists. Banco Santander is one of the most active banks in this area. In recent months, it has finalised transactions such as the Rock portfolio, which involved the acquisition of 90 million euros of secured financing by the KKR fund, and the transfer of 250 million euros of real estate and debt to Fortress and Balbec.

In just over a year, the group has sold portfolios of all kinds, totalling more than 3.2 billion in gross nominal value. At the end of March, its default ratio stood at 2.99%, down from 3.10% a year ago, with provisions covering 65.7% of doubtful financing. The balance of impaired assets stood at €34.992 billion and it had an insolvency fund network worth €22.98 billion.

According to the latest data published at the end of 2024, it also had a portfolio of foreclosed assets amounting to €4.823 billion, down from €5.506 billion the previous year. This figure is reduced to €2.131 billion when the €2.692 billion accumulated in provisions to cover the impairment of their value is deducted.

17.8 billion market

According to Axis Corporate data, the portfolio sales market closed transactions last year for a gross nominal value of €17.86 billion, although only €6.7 billion was for new asset disposals by financial institutions, with the remainder corresponding to transactions between investors despite the assets’ banking origin. One of the largest transactions was carried out by Sareb, with a nominal value of €1.5 billion.

Original Story: El Economista | Author: Eva Contreras
Edition and translation: Prime Yield

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

The Bank of Spain has just warned that lenders’ income growth was likely to slow down this year amid lower interest rates and geopolitical risks, and it would need to closely monitor the credit quality of bank loans.

In its latestt semiannual financial stability report, the central bank said the credit quality was now at favourable levels, but it could deteriorate if a potential economic slowdown weighs on borrowers.

The ratio of bad loans has been stable in Spain a little above 3% in late 2024 and early 2025, far below the all time-high of 13.6% in December 2013.

Banks’ net interest income has fallen 3.9% in the first quarter, the central bank said, after rising 22% in 2023 and 8.8% in 2024.

It also said the much-delayed implementation of the Basel III international capital rules remained a priority as it would prevent accumulation of global systemic risks. The rules should be consistent with the planned revision of the European Union’s supervisory framework, it said, to make the framework simpler without undermining the banks’ resilience.

Original Story: Reuters | Author: Jesús Aguado
Edition: Prime Yield
Image by Gundula Vogel from Pixabay