Spain’s Banking Credit Data: Trends in December
The December report on loans from all credit institutions shows a continued fall in the cost of borrowing for both companies and individuals. The average rate slipped to 3.54 percent, marking the lowest level since December 2008. This reflects a steady downward trajectory from 3.68 percent and 3.37 percent in the two preceding months, November and October, respectively. The interval data confirms a 75 basis point drop when compared with the same month last year, 2021, according to provisional figures from the Bank of Spain.
The volume of doubtful loans for the last month of the year stood at 43.159 billion euros, which is 4.87 percent lower than November 2021 and 17.86 percent lower than December of the previous year. This sustained reduction suggests improved asset quality amidst a shrinking total loan stock in the domestic private sector.
Even as the total lending to the domestic private sector contracted, the non-performing loan (NPL) ratio dropped. The outstanding loan balance was 1.219 trillion euros, about 12.0 billion euros less than in November, a relative decrease of 0.97 percent. Compared with December 2021, the NPL balance also shows a reduction of around 4.0 billion euros. These movements indicate ongoing adjustments in risk provisioning and improved credit management across institutions.
It is important to note that the figures include a methodological change in classification. Since January 2014, Financial Credit Institutions (EFC) are no longer counted within the category of credit institutions. If the change had not been applied, the December default rate would have stood at 3.64 percent, aligned with the loan balance of 3.64 percent and an amount of 1.185 billion euros for that month, excluding EFC loans.
Disaggregated by asset type, the data reveal the suspect ratio for depository institutions, which include banks, savings banks, and cooperatives. The December figure for these institutions closed at 3.45 percent, down from 3.59 percent in November and 4.21 percent in December of the prior year. On the other side, the default rate among financial credit institutions was 5.93 percent in December, higher than 6.37 percent in November but lower than 6.89 percent in the previous year, signaling relative resilience in the specialized lending segment.
According to the Central Bank of Spain, provisions held by all credit institutions totaled 31.069 billion euros in December, reflecting a 3.58 percent month-on-month decrease and a 19.32 percent decline from December 2021. These adjustments underscore ongoing caution in the sector as lenders calibrate risk exposure in a changing macroeconomic environment. All figures are drawn from provisional data and reflect ongoing reporting practices by the Bank of Spain and its overseeing bodies, with the caveat that revisions can occur as more complete information becomes available. (Source: Bank of Spain provisional data.)