With a gloomy economic forecast, deteriorating asset quality and the government's cost-cutting austerity plans, Spanish banks' bad debts have reached a record 14-year high, according to the central bank.
AFP - Spanish banks' non-performing loans ratio rose in October to its highest level since January 1996, official data showed Friday, as property-related losses weighed on lenders' balance sheets.
Total bad debt held by the banks rose to 103.7 billion euros ($137.1 billion) for a ratio of bad debt to total debt of 5.66 percent, up from 5.49 percent in September and 4.98 percent in October 2009.
The non-performing loan ratio had already risen to 5.61 percent in August, its highest level since February 1996.
Spain's lenders, especially its regional savings banks that account for about half of all lending in the country, have been heavily exposed to bad debt since the collapse of the property sector at the end of 2008.
Credit rating agency Moody's issued a negative outlook on Spain's banks Monday and warned that total economic losses could reach 176 billion euros ($232.7 billion).
It said it was maintaining a negative view for the next 12-18 months because it expected Spanish banks' capital, profits and access to finance to remain weak.
Date created : 2010-12-17