The discipline of bank customers when meeting their debts continues to be one of the most positive and counterintuitive economic factors in the midst of rising interest rates. Despite the fact that banks and analysts agree that delinquency will end up rising, the data for the moment show the opposite and place it at its lowest level since December 2008.
According to data from the Bank of Spain published this Friday, the doubtful credit rate stood at 3.5% in June, interrupting two months of increases and marking a minimum in fifteen years. It had fallen in March to 3.51% to start what now seemed to be a change in the cycle, with increases to 3.55% in April and 3.59% in May.
However, in June there was a decrease of nine hundredths, with which the rate is now at the lowest level since the 3.37% marked in December 2008. At that time, with the outbreak of the Great Depression, it began a strong escalation that took it to the all-time high of 13.62% in December 2013, after which it was gradually reduced. Before the pandemic, in February 2020, it was 4.8%.
Of the 1.2 trillion euros of credit in Spain registered by the banks on their balance sheets, 615,565 million euros are granted at a variable rate, so that they are strongly affected by the rise in interest rates, which have barely passed one year from 0% to 4.25%.
The volume of doubtful loans, also according to data published today by the Bank of Spain, stood at 42,173 million euros in June, a figure 1.5% lower than that of the previous month. It contrasts with the 47,916 million in the same month of 2022 and, if one looks back, with the more than 100,000 million prior to 2017.
There are economists like Leopoldo Torralba, from Arcano Economic Research, or José Carlos Díez, from the University of Alcalá, who point to the good employment data as the factor that explains this trend. "In the previous crisis it was found that families stopped paying the mortgage when employment insurance dropped below half, and in the last year we have not had job destruction," Díez told La Vanguardia in May to explain the contained delinquency.
An Accuracy report on the banking sector describes the state of delinquency in the entities' balance sheets as "under control", which has not prevented banks from provisioning nearly 11,000 million to cover themselves against future difficulties.
From Neovantes they calculate that delinquency among Spanish banks is below 3.6%, "with symptoms of a possible increase in the coming months due to the successive slight increases that are already observed."
In its latest quarterly reports up to June, Santander reported a fall in delinquency of 18% and CaixaBank, 17%, compared to the small increase, barely 0.2%, in the case of BBVA.
