Why are they withdrawing
Like most Spanish Banks Barclays have suffered in the last few years from higher provisioning requirements, falling incomes and increasing defaults.
As a known UK brand Barclays have one of the largest non resident mortgage books in Spain. Failure during the peak years to effectively manage risk have compounded the problems the Spanish arm has.
What were the risk assessment failures
Barclays were one of the few Banks to offer 80% loan to value during the peak years and linked this solely to valuation in a rising price market. This meant often they were actually lending 100% or more. The inexperienced members of the risk teams and the Branches also understood little about how to assess or check the credibilty of UK style paperowrk when assessing an application through the mortgage process.
This obvious lack of experience or knowledge made them a prime target for fraudulent applications and they were hit hard during the period of high volumes.
What other factors have had an impact
Barclays swung from offering the lowest possible rates and with lax criterias to closing the doors completley for a period of time to new applications, to opening them again but with very tight criteria. Aimed at attracting high net worth individuals their most recent offering failed to recognise that the type of client they wanted had complex financial situations and that to expect every client to fit tick boxes was never going to work.
Read the full article: Barclays withdraw from Spain
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