Alert in banks due to the slowdown in credit and the increase in unemployed money

PREMIUM

• VÍCTOR MARTÍNEZ

  vmartinez_EM

Thursday, October 8, 2020 - 22:30

• Share on Facebook

• Share on Twitter

• Send by email

Comment

The end of the summer has truncated the awakening of the Spanish economy, gripped by the rise of new outbreaks of coronavirus and the uncertainty about the employment and economic future of millions of families.

The first witnesses to this paralysis are the banks.

After the 'drunkenness' of financing granted to large companies and SMEs last spring from the ICO lines, entities now note a drop in demand for credit and a 'record' increase in household deposits.

"Deposits grow and grow month after month because there is a lot of savings and the demand for money is weak. We do not foresee that there will be activity in the near future because there are no investment plans and the economy is paralyzed", lamented the CEO of Banco Santander,

, last Wednesday during a financial conference organized by the entity.

The statistics published monthly by the

already beginning to reflect the weakness of credit, one of the most visible symptoms of the state of an economy.

Since the pandemic broke out last March, the funding requested by families has accumulated six consecutive months of setbacks that have been deepening.

In August, the last month available, the credit balance already accumulated a 0.9% decline compared to the same month in 2019.

The stoppage is already noticeable in the case of companies.

After registering rises close to 6% during the months of May and June in the heat of the ICO Liquidity lines, the curve accumulates three months of decreases again.

The companies took advantage of the financing mechanism put in place by the Government to gather resources with which to survive during the closing of their businesses, but very few dare to face investment plans for now given the uncertainty that the investment implies. pandemic.

This explains the 'puncture' of the ICO Investment lines that started in September and were aimed at stimulating the transformation of companies to renew their production processes and adjust their business model to the changes caused by the coronavirus.

One of the big holes is occurring in home-

due to the collapse of the mortgage market.

Only in July, a month that was no longer affected by the state of alarm restrictions, 23% fewer loans were signed than in 2019. In addition to the fall in firms, there is an increase in the rate of repayments by mortgages who want to face to the recession in the healthiest way possible, so that it can happen.

Only since February, the mortgage portfolio of the financial system as a whole has been reduced by

and is 1.7% lower than a year ago.

More savings

The second face of the crisis has to do with the record increase in deposits that financial institutions are registering.

A movement that reflects the tendency of families to save due to fear of the future and the impossibility of spending it, which on many occasions due to the restrictions imposed to contain the health pandemic.

The result is that the money accumulated in checking accounts in banks has been growing at

five months

Financial sources privately acknowledge the fear that this credit brake will end up hitting their balance sheets.

During the first months of the pandemic, banks made a great effort to create capital buffers that would allow them to contain the increase in non-performing loans that will occur in the coming months, once the public support measures expire or lose strength.

But to continue nurturing these shields, entities need to generate profits, that is, to reactivate their healthy credit.

"An ideal world is one in which you pay bad debt with the capital of new businesses, but when you destroy capital, confidence erodes," added the CEO of the first Spanish bank by assets.

The low interest rate environment in which the financial sector operates is not helping either, with the Euribor setting new negative records at -0.46%.

The entities are currently preparing their financial statements for the third quarter of the year to present them to the market at the end of this month.

These milestones will be crucial to know how these groups are enduring the crisis in all its effects: evolution of credit, increase in delinquency and deterioration in their solvency levels.

According to the criteria of The Trust Project

Know more

• economy

• living place

• Mortgages

The new merged bank will be able to pay for its adjustment by absorbing Bankia at a low price

Housing Waiting for affordable rent in Catalonia: "I have nowhere to go if they kick me out"

EconomyThe price of housing begins the decline: it will fall by 7.5% until 2021

See links of interest

• Last News

• Programming

• English translator

• Work calendar

• Daily horoscope

• Movies TV

• Topics

• Coronavirus

• 6th stage of the Giro d'Italia, live: Castrovillari - Matera

• Casademont Zaragoza - San Pablo Burgos

• Real Madrid - Valencia Basket