Spanish banks have managed to amortize 175,000 million euros of the special credits of the European Central Bank (ECB) launched during the pandemic, resorting mainly to reserves and short-term financing from the money market itself, without the need to capture significant deposits. customers and nor to reduce credit.
These conclusions are included in an article published this Thursday by the Bank of Spain about the effect of the return of what is known as TLTRO III on the national banking system. In June of last year, entities were forced to amortize most of this aid, which encouraged many analysts to predict that they should seek resources through other means, especially through customer deposits. It would have been a good opportunity to start a passive war that, in the end, did not happen.
The Bank of Spain article dispels doubts about what happened to the banks' balance sheets in the last two years. The nearly 175 billion euros of special loans received by the entities, he explains, were returned in two large batches, one at the end of 2022 and another in mid-2023, with interest rates already at high levels.
In the first phase, between October 2022 and February 2023, Spanish banks resorted to excess reserves to repay loans, while in the second, in the middle of last year, a "change in trend" is observed.
Financing from the ECB was reduced at that time by 69 billion euros, which the banks managed to compensate by resorting to short-term financing for 38 billion, issuing debt for 11 billion and capturing deposits for 26 billion, equivalent to 14%. of the total amortization of 175,000 million.
After the amortization of June last year, the balance of TLTRO III stood at 36,000 million euros, below the 12% initially awarded. Despite this, consultants like Alvarez
If the banks have been able to repay a good part of the loans by resorting to reserves, it has been because "they maintained excess liquidity in their balance sheets," says the Bank of Spain. There have been "no tensions" and the process has been closed without "unwanted alterations in the granting of credit by the entities, which would have had negative effects on the Spanish economy," he adds.
