Spanish lenders have reported record-high bad loans for August as the eurozone's fourth-largest economy fights an uphill battle to leave recession behind. The ratio rose for the sixth straight month.
The share of bad loans on the balance sheets of Spanish banks, cooperatives and credit establishments edged up again in August to the record level of over 180 billion euros ($245 billion), the country's central bank announced Friday.
It said non-performing credits now made up 12.12 percent of total debt, up from 11.97 percent in the previous month. The ration thus rose above 12 percent for the first time since comparable statistics started to be collected back in 1962.
The Bank of Spain attributed the renewed worsening of the situation to the country's two-year recession, 26-percent unemployment and new government rules forcing lenders to classify more loans as being toxic, with credits generally deemed to have gone bad, if payment had been delayed for three consecutive months.
Modest growth next year
Spain's 2008 real estate market crash left banks burdened with huge losses and prompted a large-scale restructuring process which the eurozone backed with over 40 million euros in aid for struggling lenders.
Despite the rescue money provided, credit is still slow in flowing to companies and private households, with total loans granted amounting to 1.5 trillion euros in August, marking the lowest level since 2006.
Madrid said it expected the gross domestic product (GDP) to dip by another 1.3 percent throughout the current year, with 0.7-percent growth penciled in for 2014.
hg/kms (dpa, AFP, AP)