Bank delinquency falls below 3% for the first time in almost seventeen years
The non-performing loan rate stood at 2.97% in June.
BarcelonaSpanish banking default rates fell below 3% in June for the first time since October 2008, according to data released by the Bank of Spain. The non-performing loan ratio stood at 2.97%, very similar to the 2.92% recorded in October 2008, when the economy peaked before the financial crisis.
This figure substantially improves on the rates from a year earlier, which stood at 3.11% in May and 3.43% in June, with reductions of 0.14 percentage points compared to the previous month and 0.46 percentage points compared to a year earlier. The volume of non-performing loans has decreased significantly, reaching €36.291 billion. The amount is the lowest since June 2008.
One of the factors contributing to the reduction in the non-performing loan ratio has been the total volume of credit granted, which reached €1.22 trillion, according to data from the Bank of Spain.
Total provisions for credit institutions were €27.654 billion in June, €330 million less than the previous month. In annual terms, the reduction amounted to €1.598 billion, suggesting an improvement in the financial health of the sector.
The non-performing loan ratio for the entire entity, which includes, in addition to banks, savings banks and cooperatives, stood at 2.89%, two basis points lower than the previous month and 43 points lower than the same month last year. Meanwhile, the non-performing loan rate for credit institutions stood at 5.42%, 61 basis points lower than in May and one percentage point lower than a year ago.