2023-07-24 17:48:40
Non-performing loans granted by all credit institutions to companies and individuals stood at 3.59% in May, which represents its second consecutive month on the rise, after it increased to 3.55% in April from 3.51% in March, according to provisional data published this Monday by the Bank of Spain. However, it is still below the level registered in May 2022, when the NPL ratio stood at 4.18%.
The sharp rise in interest rates in the last year anticipated a deterioration in the delinquency rate suffered by financial institutions. Higher mortgage prices make it difficult for many families to keep up with their loan payments. However, although the default has risen in April and May, it is still at fairly moderate levels. However, experts predict that as the months progress, delinquency will increase because the impact takes several months to be transferred and because families have been drawing on savings. Precisely this Thursday, the ECB is expected to raise interest rates one quart again, from 4% to 4.25%. Just a year ago, in July 2022, the rates were at zero, which gives an idea of the speed with which money has become more expensive, both for companies and individuals, which is what is driving delinquency, despite the credit restriction that is also taking place.
The volume of doubtful credits in May was 42,815 million euros, 262 million euros more than in April, while the total volume of credit granted has decreased by 8,572 million euros, reaching 1.19 trillion euros. If compared to May 2022, the volume of doubtful loans decreased by 8,249 million euros, while the volume of total loans decreased by 30,383 million euros.
The data broken down by type of entity reflect that the doubtful ratio of the group of deposit institutions (banks, savings banks and cooperatives) closed May at 3.49%, above the 3.44% of the previous month, but below the 4.08% of a year earlier. The NPL ratio of financial credit institutions stood at 6.58% in the fifth month of the year, higher than the 6.58% in April, but below the 7.15% of a year earlier. According to data from the Bank of Spain, provisions for credit institutions increased to 30,868 million in May, 122 million more than in April.
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