Spanish banks’ shop windows are a sign about their woes. In last years, they have sold banking services, affection, some credits from ICO (the country’s state-owned finance agency), more o less emotional messages and few financial products. Interests for savings are not an attractive marketing tool, particularly when Bank of Spain is watching that competition over liabilities does not suffocate balance sheets. Regarding credit entities had little to say, they have been repairing their accounts for ages, paying off loans and adjusting assets downwards, by means of refinancing or debt cancellations.
For about a week, Spain’s banks’ shop windows and web pages offer credit, mortgages as well as commercial loans, and offices’ employees suggest their clients the time to buy, invest, spend has come…even if it includes getting into debt. Families have reduced their debt levels and have enough guarantees to maintain credit in many cases. The question is what to buy and when.
Santander, Bankinter or ING are competing by mortgage offers attaching additional conditions such as insurance, accounts and so on, which raise real cost between 3.5-4%, and some other entities, for instance Basque savings banks group also offer long term fixed rates around 5%. As for consumption credit, banks are to give longer terms (until 84 months) with rate interests for the desperate near 10% APR, although this offer really means they expect people to demand credit and also capacity to pay it off.
Therefore, credit comes back cautiously with shop windows advertisings and bank’s branches managers who have part of end year bonuses linked to credit net growth. It is a recovery indicador, a sign of machines working again and pipelines flowing effective liquidity.