The banking sector measured well the risks associated with promoter credit during 2020. In fact, the six main Spanish entities drained liquidity from the sector to clean up their balance sheets and, above all, due to the implementation of credit moratoriums and the entry of loans linked to the Covid-19 crisis. The book value of financing for construction and real estate development was reduced at the end of 2020 4.2% year-on-year, up to 14,757 million euros, as compiled by ‘La Información’ from the statistical reports sent to the CNMV by Santander, BBVA, Bankia, Caixabank, Sabadell and Bankinter.
Bankinter, the bank with the least credit exposure to brick, cut this financing by 14.9%, according to its balance sheet, to 473 million. Bankia, in the process of merging with Caixabank, lowered this item by 15.8%, to 1,029 million. Caixabank’s financing volume fell by 5.8%, to 5,233 million, while Sabadell was the only one to increase its exposure, by 1.9%, to 2,938 million. In the two big banks they registered a different behavior. Santander fell 0.8%, to 2,801 million, while in BBVA it fell 3.3%, to 2,283 million.
The The Covid-19 pandemic crisis has hit all sectors across the board, although real estate has not been one of them to date. The promoters registered during the past year a high volume of delivery of homes completed long ago and took their foot off the gas when undertaking new projects.
The companies in the sector have managed to deliver most of the homes estimated for 2020 as they are projects that were already closed in previous years. The main promoters managed to put more than 2,500 homes on the market and the results showed it, with increases in the number of benefits or income for this reason.
In fact, the banking sector accelerated the reduction of doubtful loans in construction and real estate development. Potentially bad or higher risk loans plummeted 32.4% year-on-year to 826 million euros. At the head of the descent is Bankinter (-67%, up to 5.6 million), Sabadell (-53%, 111 million), Cashier (-22%, 238 million), Bankia (-31%, 110 million), BBVA (-22%, 243 million) and Santander (-36%, 117 million).
However, real estate suffered less than sectors such as tourism in terms of credit tightening. The average price applied to new business loans for amounts less than 250,000 euros and that are usually associated with SMEs and the self-employed rose in January to 3.48% APR from the 2.55% set in December, according to Servimedia from the latest survey of bank loans from the Bank of Spain.
The fear of financial institutions a wave of delinquencies as soon as measures such as moratoriums (postponements) are lifted It has caused them to stop the granting of credit and, for the first time since the crisis broke out, credits are becoming more expensive due to the absence of new public guarantees from the ICO, which issued a figure of 100,000 million in 2020.
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