If the bank is solvent, it is also thanks to its clients, who at least for now pay their debts. Santander, BBVA, CaixaBank, Sabadell and Bankinter, the five largest Spanish banks, have just offered in their latest results presentations the lowest delinquency data since the 2008 crisis. In the case of CaixaBank, the percentage is the best in terms of historical. They do it while the ECB and the Bank of Spain put the magnifying glass on the health of the banks, in anticipation of worse times.
The recently presented delinquency rates are the most up-to-date of those available and include for the first time the onslaught of the Euribor. The cost of mortgages began August below 1% and stood at close to 2% in less than a month. It is already almost at 3%, a warning sign for many domestic economies. Other loans have also become more expensive since the ECB announced the first rate hike in a decade at the end of July.
The pressure on the consumer has only just begun and the first results are already in bank balance sheets. According to information from the entities themselves, Santander closed September with a delinquency in Spain of 2.58%, when a year ago it was 3.15%. Before the pandemic, levels of 7% were reached. BBVA has lowered it to 3.9%, compared to 4.09% a year earlier or at rates of between 4% and 5% in the last decade. CaixaBank, with Bankia integrated, has just touched the historical minimum of 3%, far from the peaks of 11% produced between 2014 and 2021. Bankinter is around 2% and Sabadell has a ratio of 3%.
This salad of percentages belies the forecasts that at the beginning of the year warned that delinquencies could reach 7% this year, with an economy stressed to the maximum by the Russian invasion of Ukraine. However, behind it are also the massive sales by banks of portfolios of doubtful loans.
The latest delinquency figure from the Bank of Spain, for August, placed it at 3.86%, barely one hundredth more than the 3.85% of the previous month. At that time, the Euribor had not yet started its climb, but inflation reached 10.5%.
For the moment, the Bank of Spain and the ECB nip any triumphalism in the bud. The governor of the Bank of Spain, Pablo Hernández de Cos, asked the banks on Friday from Girona to plan their risks well, while Luis de Guindos, vice president of the ECB, warned them not to be "blinded" by their good results , but to raise the provisions.
The large Spanish banks recognize that the time has come to be alert, even though they publicly offer good results and prospects for dividends. The European Commission expects Spain to go from growing 4.5% this year to 1% next year, in the midst of a recession in the euro zone. The ECB has already raised rates to 2% and warns of further increases.
In the last presentation of results, the CEO of Banco Santander, José Antonio Álvarez, recalled that the health of the business depends on that of the debtors. “My main interest is that my clients can pay,” he said. The CEO of BBVA, Onur Genç, assured that the low delinquency rate is actually "one of the best news of the quarter", which was buoyant in profits.
The CEO of CaixaBank, Gonzalo Gortázar, also emphasized this aspect, in which the sale of low-quality portfolios has been key. “We have strongly reduced doubtful balances, which has allowed us to place the non-performing loan ratio at 3%, which is the lowest level since 2008”. The bank is "confident that it can help society in the current context of uncertainty," he added.
