Non-performing loans (NPL) granted by all credit institutions to companies and individuals fell in July to 3.85%, slightly down from 3.88% in the previous month, when it fell below the 4% mark for the first time in 14 years.
Provisional data from the Bank of Spain show that the doubtful assets ratio remains at its lowest level since December 2008. The decline with respect to a year earlier is 54 basis points.
The reduction in the NPL ratio of the private sector is due to the fact that the fall in the volume of doubtful loans (-1%) exceeded the decline in credit granted (-0.16%).
Specifically, credit to the resident private sector fell by €1.987 Billion to €1.232 trillion, while the total volume of non-performing loans fell by €481 million to €47.435 billion (the lowest figure since August 2008).
Compared with July 2021, total lending increased by €11.776 billion and the doubtful balance decreased by €6.209 billion.
The figures include the methodological change in the classification of Financial Credit Establishments (EFCs), which since January 2014 are no longer considered within the category of credit institutions. Excluding the change, the NPL ratio would stand at 3.95%, since the credit balance was €1.2 trillion in July, when excluding the credit of CFCs.
The data broken down by type of institution show that the doubtful assets ratio of all deposit institutions (banks, savings banks and cooperatives) closed July at 3.77%, compared with 3.77% in June and 4.33% a year earlier.
The NPL ratio of financial credit institutions stood at 6.28% in the seventh month of the year, up from 6.22% in June and down from 6.5% a year earlier.
According to data from the Bank of Spain, provisions for all credit institutions fell to €33.18 billion in July, down €178 million in the month and €5.802 billion in the year.
Original Story: Estrategias de Inversión | Europa Press
Photo: Photo by Victor Iglesias from FreeImages
Edition and translation: Prime Yield