MADRID — Spain's recession is putting pressure on the banks, whose bad loans swelled to 11.2 percent of total lending in May, from 10.9 percent the previous month.
Spanish banks' bad loan burden up in May amid recession, up by 14 bln euros from 2012
July 18, 2013 at 11:00AM
Central bank data Thursday showed non-performing loans totaled 170.23 billion euros ($223.6 billion), 3.14 billion euros ($4.1 billion) more than in April. The total was 14.25 billion euros higher compared with May 2012.
The ratio has soared from 1 percent in 2007, the year before Spain's real estate collapsed, triggering an economic crisis. Spain has been in recession for most of the past four years and now has a 27. 2 percent unemployment rate.
The government claims its measures are beginning to pay off and the recession should end late this year but international experts are less optimistic.
The Treasury drew some cheer Thursday as it sold an above-target 3.1 billion euros in three-, five- and 10-year bonds with the average interest rate demanded by investors dropping slightly for all three.
For the benchmark 10-year bond, the rate dropped to 4.72 percent from 4.76 percent in the last such sale June 20.
The bond market borrowing costs had fallen for months, but increased again in recent weeks amid renewed concerns over Europe's debt crisis.
The Economy Ministry says Spain had already sold more than 70 percent of the debt it plans to auction in 2013.
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