Spanish bank borrowings from the European Central Bank rose to 76 billion euros ($104.1 billion) in October, the highest level in more than a year, as Europe’s debt crisis limited financing for the country’s lenders.
The average amount borrowed in October compared with 69.3 billion euros in September and was the highest since the 102.8 billion euros borrowed in September 2010, according to data published by the Bank of Spain on its website today.
Spanish banks have struggled to raise funds from wholesale markets while competition to capture deposits from retail customers has increased, leading some to step up borrowing from the ECB. Banca Civica SA, a lender that sold shares earlier this year to bolster capital, had more than 1.8 billion euros of funding from the ECB at the end of September, and tapped another 800 million euros in October as net interest income plunged, Chief Financial Officer Roberto Rey Perales said today.
The extra yield investors demand to lend to Spain rather than Germany for a decade rose to 398 basis points today from 396 basis points on Nov. 11. It reached 410 basis points last week, matching its August peak before the ECB started propping up the market with purchases of Spanish debt.