Spain: Banks' non-performing loans had reached a record low since 1993 by the end of 1999. Most experts agree, however, that this trend has reached an end. Since January consumer non-performing loans have been increasing slowly.
The best way to analyse future non-performing loans is to study the sector most affected, mainly leasing, factoring and so-called finance companies, whose customers are companies or individuals. These organisations are currently on a high given the sharp growth in the economy, which shot up 4.2 per cent in the second quarter.
However, in the last 5 months, factors and leasing companies have experienced a 5% increase (by 32m euros) in non-performing loans. This is probably caused in part by their less rigorous policies when calculating the risk premium and by the recent rise in interest rates.
Source: Expansion 22 Aug 2000
