Problems of the Spanish economy faces troubles of this country’s largest banks, including Banco Santander and Banco Bibao Vizcaya Argentaria (BBVA). Although financial institutions were able to relatively easily survive the acute phase of crisis, their stability can put an end to the lamentable state of the Spanish economy and bad loans.
Banco Santander and BBVA relatively easily able to survive the financial crisis and blowing bubble in the local real estate market in the past year. Following the 2009 Santander increased its net income by 1% to 8.9 billion euros, BBVA profit decreased by 15%, to 4.2 billion euros. Banks managed to make a profit due to activity outside of Spain. Inside the country’s own financial institutions suffered significant losses due to sharp drop in returns on mortgage debt, resulting in even went to the restructuring of the client’s debt. According to the Spanish Institute of National Statistics, in 2009 the number of amendments to the treaties on the mortgage has increased by more than 55%, and the total to nearly 436 thousand
stability of the bank in Spain, previously contributed ” ; airbag “in the form of required reserves, but the acute phase of the financial crisis has significantly depleted the resource. If the volume of required reserves for “bad” debts of the bank Santander in 2008 was 138%, then the end of 2009 this ratio had dropped to 75%. Cases have BBVA is even worse: its rate of coverage dropped from 92% in 2008 to 57% in 2009. And although, according to the banks, the proportion of bad debts in their credit portfolios is insignificant (in Santander in 2009 it was 3,2%, at BBVA – 4,3%), for the year compared with the two banks rose almost doubled and will grow more. The reason – the dire state of the Spanish economy, which, according to some experts, is among the most problematic countries in the eurozone.
According to Vice-President UniŠ”redit Tullio Bucca, the main problem of Spanish banks is that even in the pre-crisis time, they issued loans to borrowers with poor credit status – it can play a cruel joke with them in the future. “Economy of Spain still has not recovered from the crisis, one of the main sectors – construction – is in deep depression, with a complicated situation threatens to persist for a long time”, – said Ms. Bucca RBC daily. An eloquent testimony to this is the high unemployment in the country: local authorities expect that by 2013 its level will remain high, within 18-19%, said vice-president UniŠ”redit.
