The stock of non-performing loans (NPLs) held by Spanish banks fell to €30.1 billion in March, bringing it close to dropping below the €30 billion mark for the first time since 2008, while the sector’s bad-loan ratio declined to 2.54%, its lowest level since the global financial crisis, according to data from the Bank of Spain.

The volume of NPL in the banking sector decreased by €563 million during the month to €30.082 billion, extending the 12-month reduction to €5.47 billion. The NPL ratio for banks, savings banks and credit cooperatives fell by seven basis points from February and by 58 basis points year-on-year, reaching its lowest level since August 2008.

Consumer finance institutions also recorded an improvement in asset quality, with their delinquency ratio edging down to 5.05% from 5.10% in February and falling 74 basis points compared with a year earlier. Their stock of doubtful loans stood at €2.222 billion at the end of March, €73 million higher than in February but €332 million lower than a year ago.

Across the entire credit sector, including deposit-taking institutions and specialised lenders, total doubtful loans amounted to €32.471 billion in March, down €492 million from the previous month and €5.809 billion from March 2025. The overall NPL ratio declined to 2.62%, seven basis points lower than in February and 59 basis points below its level a year earlier, marking another post-crisis low.

Meanwhile, lending activity continued to expand. Outstanding bank credit rose to €1.237 trillion in March, increasing by €10.5 billion month-on-month and by €46.2 billion compared with the same period last year.

Loan-loss provisions across all credit institutions totalled €26.855 billion at the end of March, down €151 million from February and €1.73 billion lower than a year earlier, according to the Bank of Spain.

Source: Europa Press
Edition and translation: Prime Yield