Open

Coming up

Don't miss

Replay


LATEST SHOWS

WEB NEWS

France's top consumer group sues Internet giants

Read more

WEB NEWS

Web users pay tribute to South Korea ferry victims

Read more

AFRICA NEWS

A landslide victory for the 'invisible candidate' in Algeria's Presidential polls

Read more

THE WORLD THIS WEEK

The World This Week - 18 April 2014

Read more

THE WORLD THIS WEEK

The World This Week - 18 April 2014 (part 2)

Read more

MEDIAWATCH

Presidential adviser resigns over "shoe-shine scandal"

Read more

#THE 51%

Breaking stereotypes

Read more

#TECH 24

Galaxy S5 v. HTC One (M8): Which is the right one for you?

Read more

FRANCE IN FOCUS

New PM Manuel Valls outlines priorities

Read more

  • Why Syria’s cash-strapped jihadists let hostages go

    Read more

  • Video: Ukraine separatist crisis overshadows Easter celebrations

    Read more

  • The Great War's unsung four-legged heroes

    Read more

  • Divers begin pulling bodies from sunken South Korean ferry

    Read more

  • Ukraine rebels call for Russian troops after deadly clash

    Read more

  • UK’s Hamilton cruises to victory at Chinese Grand Prix

    Read more

  • Freed French journalists arrive home after Syria ordeal

    Read more

  • Syria’s Assad visits recaptured Christian town at Easter

    Read more

  • In pictures: French kite festival takes flight

    Read more

  • Le Pen’s National Front fail to woo Britain’s Eurosceptics

    Read more

  • PSG clinch fourth League Cup title after beating Lyon

    Read more

  • Militants kill Algerian soldiers in deadly ambush

    Read more

  • Scores killed in South Sudan cattle raid

    Read more

  • VIDEO: Anti-Semitic leaflets in Eastern Ukraine condemned

    Read more

  • Bouteflika, the ghost president

    Read more

  • Does Valls’ upcoming Vatican trip violate French secularism?

    Read more

  • Ukraine separatists say ‘not bound’ by Geneva deal

    Read more

  • Abel Ferrara’s hotly awaited DSK film to premiere on web

    Read more

  • Obama signs bill to block controversial Iran diplomat from UN post

    Read more

  • Astronomers discover Earth-like planet that could support life

    Read more

  • In pictures: Iranian woman pardons son’s killer at the gallows

    Read more

Europe

Toxic debts in Spanish banks reach record 14-year high

©

Text by News Wires

Latest update : 2010-12-17

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.

The verdict came as Spain battles to convince nervous markets that its finances are solid and there is no reason to fear it will need an Irish-style economic and banking rescue.
             
All eight major Spanish banks passed European Union bank stress tests conducted in July on their ability to weather a crisis although five out of 19 regional lenders failed.
             
But markets have cast doubt on the tests, which gave a pass to the now crisis-hit Allied Irish Banks and Bank of Ireland.
             
Moody's blamed banking weakness on Spain's economic woes, deteriorating asset quality and the government's cost-cutting drive, which would mean no quick relief for a near 20-percent jobless rate.
             
"Moody's expects corporate profits to remain depressed for some time, especially in view of the limited likelihood of an additional economic stimulus, adding strain on unemployment and contributing to further deterioration in loan quality," said the report's author, Moody's senior analyst Alberto Postigo.
             
The agency said it expected economic lifetime losses for Spanish banks of up to 176 billion euros, of which the banks had so far only recognised 88 billion euros through write-downs and reserves.
             
After taking into account funds committed by the government and other offsets, Moody's estimated there was still a net capital shortfall of 17 billion euros.
 
 

 

Date created : 2010-12-17

  • SPAIN

    Stimulus move set to shake up market

    Read more

  • SPAIN

    IMF chief backs Madrid's austerity measures

    Read more

Comments

COMMENT(S)