Spanish banks are continuing with their credit contraction policy. September figures that were published by the major lenders indicated that loans granted to families and small businesses have already dropped more than 6%. Predictions for next year don't look too pretty either, considering that the current trend is expected to continue and loan issues will drop another 5% in 2012.
Not all lenders are decreasing the volume of private-sector loans. Looking at August figures, we see that Banesto has not lost market share despite having seen 8% drops in this kind of business. And Bankia dropped 6.2% as well.
Added to these figures are the strong decline in credit investment in Santander's network. In the first nine months of the year the lender contracted more than 7%, including at once loans granted to the private sector and government. Lines of credit granted to the Public Administration. Because these show an estimated 7.5% increase in the volume of loans granted to families and companies. Lendars are blaming the decrease in financing to pandemic risk in the global economy, general lags in investing activity and increasing solvency requirements.
Reducing Risky Business
Still, experts are pointing out that financial entities' need to reduce their risk in order to increase solvency and avoid a greater increase of payment defaults is one of the main causes of the current credit crunch. This need is increasingly urgent for the near term owed to the capital requirements spelled out by the EU. Some of the affected lenders, such as Popular, have already taken heed.
