Last week saw all the Spanish banks report on their performance for the first quarter of 2014.
Apart from BBVA the second largest Bank in Spain by capitalisation all other Banks announced a general improvement to both overall profitibilty and a reduction in the level of Spanish Mortgages in default as a percentage of the book.
Bankinter whilst reporting slightly lower profits than market predictions had one of the best increases in profits. Bankinter has a much lower default percentage than most of the other big players at 5.2% when the average across all lenders is above 13%.
Bankia the Government owned banking group also showed a quarter on quarter and a year on year improvement. Bankia more than any other Bank in Spain has benefited from passing its bad assets to SAREB who was set up to help Banks remove their vast property portfolios from their own balance sheets.
Are the improvements having an effect on Spanish Mortgages
In the resident market there is a steady but sure uptrun in the mortgage market. The improvements include a price war for attracting commercial lending along with a reduction in rates for residential loans particularily at the lower loan to value level.
For non Residents there has been little movement on terms and conditions but we are starting to see this slwoly chnage or Banks at least recognise change is needed.
New product for loans on purchases above 400k has been launched by Sabadell in the last couple of months and other Banks are willing to move from standard pricing to secure quality clients.
Who is buying in Spain with credit still tight
Clients buying in Spain and requiring legal services are rising in numbers and many of these are still cash buyers. It is becoming however more obvious that for the property market to recover fully mortgages in Spain must start to flow more easily and product adjustments happen. The Banks now have lending targets so are keeping a watchful eye on each other and once one moves significantly the others will follow.
Read full article:Spanish banks report lower mortgage defaults
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