Bad debt in Spain triples in 12 months to June
Higher interest rates, rising unemployment and a collapsing property market have driven many customers to default.19 August 2008
SPAIN - The value of non-performing loans held by Spanish banks almost tripled in the 12 months to June as a combination of higher interest rates, rising unemployment and a collapsing property market drove many consumers to default.
As a proportion of bank's total loan portfolios, money in the hands of delinquent borrowers stood at 1.61 percent of the total, a level that government officials say remains relatively small and does not put the health of the Spanish financial sector at risk.
However, with non-performing loans already amounting to EUR 28.4 billion, there are fears that banks will start to suffer if the slowdown continues and an increasing number of clients finds it hard to make ends meet.
The government expects interest rates to fall later in 2008 and early in 2009, offering consumers some relief.
[El Pais / Expatica]
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