Jan. 18 (Bloomberg) -- Bad loans as a proportion of total lending at Spanish banks jumped to a record 11.38 percent in November in a sign of the challenges still facing the country’s banks even as their shares and bonds rally.
The proportion rose from 11.23 percent in October as 2 billion euros ($2.67 billion) of credit soured in the month to take the total amount of defaulted loans in the banking system to 191.6 billion euros, the Bank of Spain in Madrid said on its website today.
The bad-loans data serves as a reminder to investors, whose buying this year spurred rallies of 19 percent in Banco Popular Espanol SA and 16 percent for CaixaBank SA, of the tough conditions still facing Spanish banks as the country’s five-year economic slump deepens. The economy will contract 1.5 percent this year after shrinking 1.4 percent in 2012, according to the median of 38 estimates in a Bloomberg survey.
Lending shrank 0.3 percent in November from October and 5.7 percent from the same month a year ago, the Bank of Spain said.
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