Spanish lenders saw bad loans as a proportion of total lending climb to a record 10.71 percent in September as the country’s five-year slump spurred non-payment by companies and real estate developers.
The ratio increased from a revised 10.52 percent in August as 3.65 billion euros of loans turned sour in the month, the Bank of Spain said on its website today. The bad-loans ratio was 7.16 percent a year ago.
Spain’s recession continues to push loan defaults to new highs as lenders, including Banco Bilbao Vizcaya Argentaria SA (BBVA), report rising non-payment by companies and property developers. The government introduced rules last week to protect low-income families from eviction after mounting mortgage defaults spurred home repossessions by banks.
Bank lending expanded 0.2 percent in September from August and dropped 4.9 percent from the same month a year ago, the Bank of Spain said. Deposits rose 1.4 percent from the previous month and declined 7.3 percent from a year earlier.
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