Contrary to what was predicted and what happened in other crises, guilt between Bank credits did not increase during Pandemic and ‘shock’ inflationist of the last three years. Actually, default rate reduced to total credits 3.5%lowest level since December 2008 (The dawn of the Great Financial Crisis). However, banks last year hidden increased risk that houses they cannot pay their debts. Therefore, by the end of 2022, organizations 33,565 million family loan euros in spain private surveillance Due to the high risk of nonpayment, 2,153 million and 6.8% more more than in 2021 and 3.071 million and 10% more than in 2019 Bank of Spain.
The most striking aspect of this increase is just break down occurring in the fiscal year between indicators measuring payment capacity registered bank customers “general improvement” and even “higher speed” According to the period 2020-2021. ” slowdown in activity it doesn’t seem to reflect the last year, At least for nowon the rise credit quality deterioration registered by organizations”, the supervisor pointed out in the latest edition of its biannual financial stability report.
Like this overdue assets Default of more than 90 days- fell at a “higher rate than in previous years” (18.5%, equivalent to 39.936 million, above) 3.5% of total loans), with a “widespread” recovery across sectors. defaults business they went down 4.73% (23,000 million) and households with 2.77% (16,936 million). loans refinanced or restructuredlikewise, it decreased by 16.5%, 4.2%. and credit in private surveillance also fell (12.2%, to 80,989 million, 7.1% of the total), but the reason for the decline is only companies (-22.3% to 47.424 million, 9.75%), since houses there was the aforementioned “moderate increase” (most 5.48% ratio of total loans to families). Also, together with 24.5% above As highlighted by the International Monetary Fund, from pre-pandemic levels (IMF) in its latest report on Spain in January.
households were penalized
From these data default risk Perceived by the banks, it is thought that the increase in interest rates threatens the banks in order to fight inflation. punishing households more More than any other economic agent, the Bank of Spain has already warned of an increase in the exchange rate. 400 basis points of Euriboronce fully credited (only did this at 30% for now), to increase Number houses in debt sensitive (interest payment of more than 40% of income) significantly. Thus, from 10.4% (1.19 million) of the total to 13.9% (375,000 more, up to 1.56 million).
Not all loans under special supervision will eventually default, but some will default, which means predictable HE guilt to start grow throughout the year. The truth is that, unprecedented support distributed by public sector Turning to the private sector to mitigate the effects of the pandemic and the inflationary spiral delay this expected increase in default. But the emergence of effects rate increases (each takes up to 24 months progressive) with full impact on economic activity end of help Against the rise in prices, make sure that defaults are expected to increase this year for the first time in ten years.
Precaution
Authorities and organizations, in this sense, consider it reasonable that the default rate is starting to increase. start summerand especially in the last half of the year, with the revision of the variable rate loan set in line with the prices, The rapid rise of Euribor. For example, mortgages are normally reviewed annually, or at most every six months. This payment problemsThey expect to focus. low income families, smaller and more indebted companiesand specific business sub-sectors most affected by price increases. But in any case, they think this will be an increase in defaults. moderate and manageableAlthough it will continue predictably a few months.
In this context, it is necessary to interpret the constants. call for caution which the Bank of Spain conducts for organizations. “in an environment uncertainty too highincluding those related to the degree monetary policy tighteningone of our institutions prudent policy planning provisions And capital city“The governor warned them, Pablo Hernandez de Cos, A few days ago. Non-payment is a key variable in the banking business, as regulation obliges businesses to reserve to face losses caused by defaulting loans so as not to affect their assets. solvency. Therefore, the larger the outstanding loans, the less profitable are assets and less resources to have to finance its impact on families and companies, and therefore on economic growth.