The results of the Spanish banks known in recent days have confirmed that families and companies are healthy. Delinquency has risen very slightly in almost all entities, but as they have explained, has had more to do with the balance (which has been reduced because it has been amortized more) that with non-payments, that have barely risen.
Analysts, economists and even the bankers themselves They feared the worst at the beginning of 2023. The context of high interest rates and strong inflation led them to predict that there would problems paying mortgages and loans. However, this scenario has not occurred and the same banks now see it as very difficult for it to happen in 2024, a year in which the economy will grow less, but rates are expected to begin to fall and inflation will be more controlled.
The bank has explained that households (mainly) have taken advantage of savings to pay off part or all of the mortgage, after quota increases. The growth in employment and low unemployment have given oxygen to families, who have not seen their income reduced and, therefore, have been able to pay their debts.
What the rate increase has affected the most is the production of new mortgages, he recognizes that the sector, which has signed less than in 2022. According to data from the INE, the drop has been almost 18% last year. The entities believe that prices have slowed down demand, but it exists and is stagnant. Therefore, it will be reactivated in 2024. However, consumer credit has held up and has even been stronger in 2023.
In this context, and according to the latest income statements presented by the five largest banks in the country, Sabadell has closed the year with the highest default rate among its competitors, 4.22% in Spain. This rate, furthermore, rises slightly from the 4.13% at the end of 2022. The entity’s financial director, Leopoldo Alvear, indicated in the presentation of results that if the default ratio increased in the year It was because the total credit balance decreased (from 115,208 to 110,450 million) not because doubtful loans increased.
The CFO also assured that in 2024 “the trend you see is positive”, because already in the last quarter of the year doubtful balances in Spain were reduced by 100 million (those classified as stage 3) and they hope that this exercise will also produce a gradual reduction.
After Sabadell, it is BBVA that has the highest default rate, 4.1%. In his case, it also rises from the 3.9% that it presented in Spain at the end of 2022. The CEO agreed that it is due to the reduction in the total balance, but also indicated that there has been an accounting change in the fourth quarter which has caused them to reclassify some loans.
“We have seen a slightly greater increase due to this effect, due to the change in regulations,” commented Onur Genc in the presentation of results, where he also insisted that they have not observed any problems with the payment of mortgages in Spain because 75 % of the mortgages they have in their portfolio, although they are at a variable rate, were originated before 2012, and, therefore, “they are old and the increases in installments have been very small.”
Santander, which until two years ago was the bank with the highest default rates in Spain, has continued to reduce it and closed 2023 with a ratio of 3.06%, compared to 3.27% a year before; CaixaBank, which had managed to reduce it in the first months of the year, has closed the year with the same default rate in Spain as in 2022, at 2.8%. And it also registered an increase in the fourth quarter “due to the incorporation of the new criteria to identify doubtful accounts, without any deterioration,” explains the bank. In your case, The increase has occurred mainly in mortgages.
The CEO, Gonzalo Gortazar, explained that families’ delinquency is holding up well because they have granted (or are in process) 6,400 requests to the Code of Good Practices, they have carried out 90,000 refinancing operations and thousands of novations. In short, they have tried to offer solutions to their clients so that they would not stop paying their loans.
Bankinter, which is the bank with the lowest default rate in Spain (among its competitors) has also registered a slight increase from 2.3% to 2.4% During last year. However, the financial director, Jacobo Diazboasted that they continue to be below the average for the financial sector in Spain (the sector’s default rate is 3.5%) and assured that “today, “There is no clear evidence that delinquencies are deteriorating.” They only see a rebound in the consumer financing business, which has higher interest rates.
2024-02-03 22:29:39
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