The change in trend in lending has been the most positive element in the Spanish banks’ first half 2016 results, Norbolsa says.
In Q2’16, there has been a slight increase in the loan book vs Q1 (new loans more than offset amortizations) despite what the sector had said in previous quarters, Norbolsa analyst Amaya Miñambres notes.
“We think this improvement (in lending) could be motivated by the lenders’ need to reach a minimum target for granting funding (a benchmark of 2.5%) to obtain the maximum benefit from TLTRO II (with a cost of -0.4%),” Miñambres says, while adding that she hopes the banks have not relaxed on their risk analysis to meet this goal.”
Political stability in Spain (e.g. with the formation of a new government) could also boost lending, mainly in the corporate segment, the analyst says.