Bank delinquency fell in the last month of 2020 to 4.51% due to government support

The bad debt granted by banks, savings banks and cooperatives to individuals and companies fell in December 2020 to 4.51%, compared to 4.57% previously and below 4.79% a year earlier, according to provisional data from the Bank of Spain.

In the last month of the year, doubtful loans experienced a decrease of 1.75% compared to November, to 55,164 million euros, a figure 3.57% lower than in December 2019.

This fall occurs despite the fact that the main international and national organizations, as well as credit firms, foresee that in the years 2021 and 2022 the default arising from the coronavirus crisis will emerge, which remains contained by government support. Some estimates point to a rebound of up to 8% next year.

In December there was no increase in total credit in the sector, which stood at 1,224 billion euros, 0.44% below November. However, the figure was 2.58% higher than the figure from a year earlier.

The figures include the methodological change in the classification of Financial Credit Institutions (EFC), which since January 2014 have ceased to be considered within the category of credit institutions. Without including the methodological changes, the NPL ratio would be 4.62%, since the credit balance was 1,193 billion euros in December 2020, excluding credit from EFCs.

Provisions for financial institutions stood at 39,835 million euros in December, 1,070 million above November (+ 2.76%) and 11.79% more than in the same month of 2019.

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