The nonperforming loan ratio (NPL) within the Spanish banks fell in June to 3.5%, thus dropping to its lowest level in the last 15 years. According to latest data published by the Bank of Spain and collected by Efe, the balance of NPL has fallen in just one month by around €655 million, standing at €42.173 million, its lowest figure since July 2008, when it was around €41.050 million.

This reduction allowed the weight of the total loan portfolio to be cut by 9 basis points, from 3.59% in May to 3.5% at the end of the first half of the year. This is the lowest ratio since 3.37% in December 2008.

In the years between 2004 and 2007, this percentage remained generally below 1% and then gradually rose until it exceeded 13.6% at the end of 2013. It then embarked on a downward path, which is continuing for the time being.

NPL ratio declines

In year-on-year terms, the NPL ratio has fallen by 38 basis points, from 3.88% in June 2022. Also contributing to this decline in NPLs was the increase in the overall loan portfolio, which closed the first half of the year at over €1.205 trillion, compared with almost 1.192 trillion in May.

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 3.39%, down from 3.39% the previous month and 3.80% a year earlier. The NPL ratio of financial credit institutions fell to 6.33% in the sixth month of the year, down from 6.58% in May and below the 6.22% of a year earlier.

Original Story: La Información |Noticia 
Photo: Photo by Philipp K on FreeImages
Edition and translation: Prime Yield