Banks and savings banks in Spain continue to profit despite continual losses associated with their loan portfolios. In August they earned 178,597 billion euros in total, which is 10.51% of the financial systems GDP and equal to 1.8% of Spain's GDP.
Despite difficulties that companies and citizens are having paying down debts, banks are posting earnings because of new accounting criteria, which according to reform guidelines have started to file some debt as potential real estate loan defaults. The worst part is that the higher rate of default will continue until the real estate market stabilizes, the economy starts growing again and jobs are created.
