The bank delinquency rate closed 2023 at 3.54%, a percentage very similar to that recorded month after month during the second half of the year and slightly higher than the 3.45% of the previous year, according to the data released this Friday by the Bank of Spain.
Above all, it is a level significantly lower than the forecasts at the beginning of last year by analysts and consulting firms such as EY, which pointed to rates above 4% as a result of the interest rate increases that began in mid-2022.
The cause of the containment is found in the good performance of employment, according to experts, who do not stop pointing out in their reports the need for banks to be prudent. This message is also the one repeatedly sent by the European Central Bank (ECB) and the European banking authority (EBA).
The credit rating agency DBRS has published a report this week in which it concludes that job creation in Spain is the determining factor that is preventing a deterioration in the quality of the banks' credit portfolio. The labor market performed "solid" last year and entities will be able to benefit from a "resilient labor market."
Their perception is that Spain has experienced a "structural change" in the labor market, and another agency, Moody's, agrees, whose latest annual report on the country's sovereign debt assures that "the Spanish labor market has improved significantly in the last decade". In his case, he does not associate this trend with the situation of the banks.
The current delinquency is somewhat above that of 2022, but remains at comparable levels to that of 2009. That year had begun with a delinquency of 3.37% and ended with another of 5.08%, due to the beginning of the Great Depression. At that time, unpaid loans began a sharp rise that led to the historical maximum at the end of 2013, of 13.62%. The rate was falling and stood at 4.8% before the pandemic.
The banks themselves have recognized in their recent results presentations the contribution of employment to containing defaults, although they are closely monitoring possible increases. "We are seeing that it is rising," but "as long as the unemployment rate does not increase, the economy in general and the banks will do well," says the president of ING in Spain, Ignacio Juliá, in a recent interview with La Vanguardia.
In any case, analysts recommend caution in their reports and warn that banks must match the improvement in their results with new provisions. Neovantas cites an "increase in unemployment" as the key factor to guarantee the banks' credit performance and Accuracy warns that, although "significant increases in delinquencies are not observed", there is an increase in the cost of risk.
The statistics of the Bank of Spain also show that nearly half of the debt contracted by individuals and companies with banks is at variable rates, which places the country's exposure to changes in interest rates at levels somewhat higher than those of the environment.
