Credit falls more than 2% and adds two months of declines in households and companies

2023-07-04 03:55:03

Bank financing continues its decline as interest rates continue to rise, both for families -with a decrease of 2%- and for companies -with a fall of 2.9% in May compared to the same month of the year former-. This is shown by the statistics published by the Bank of Spain, which specify that financing to companies fell by 27,444 million euros compared to May 2022 and 0.3% compared to the month of April, with a drop of 1,903 millions. It thus adds its second month down after the rise in March, which broke with six consecutive months of rises.

In total, the balance of business financing closed the fifth month of the year at 921,537 million, its lowest figure since September 2020. Just over half (468,029 million) were loans from credit institutions, a figure 3% lower than that of a year ago. The rest were foreign loans (325,163), with a drop of 0.6% year-on-year, and debt securities (128,345), with a strong decline of 7.7%. The debt of companies in May stood at 8,021 million below the data for April, 0.9% less. This financing fell year-on-year due to the decrease both in loans with financial institutions and in debt securities and foreign loans.

For its part, financing to households fell by 13,783 million (-2%), to a total of 689,251 million, its lowest figure since March 2006. In monthly variation it fell by 0.9%, which is 8,021 million less than in April. Thus, it adds its sixth consecutive month down. Household mortgage loans, which represent the majority of its total debt, stood at 504,601 million in May 2023, which is 13,008 million less than a year earlier and 1,778 million less than the previous month. This amount fell 2.5% compared to May 2022 and 0.4% compared to April of this year. The amount that families allocate to pay to buy a home continues to occupy most of their indebtedness, since it represents around 73.2% of it.

Household loans for consumption grew by 3.4% in May in the interannual rate, up to 96,208 million euros, which represents 3,180 million more than a year ago and 542 million compared to the previous month, with a slight increase in monthly rate of 0.6%. Loans for other purposes totaled 85,110 million euros, below the 89,281 million a year earlier and slightly lower than the figure for the previous month (0.8%).