Spanish households reduced their savings efforts marginally in the third quarter of 2017. Despite the Spanish banks’ attempts to offer positive returns on deposits against a backdrop of negative interest rates from the ECB, families are looking for greater returns from other kinds of financial assets like investment funds.
Bank of Spain
The stability in Spain’s growth in the fourth quarter compared with the third is the result of two forces pulling in opposite directions: the strength of the export markets has offset the adverse effect of increased political uncertainty in Catalonia.
Spanish banks NPLs ratio fell to 8.22% in October, over one percentage point lower than a year earlier. Recently published figures from the Bank of Spain show that the pace of the decline in NPLs accelerated in October, registering an anual 12.52% drop (-11.64% in September).
All the sectors in the Spanish economy should contribute to improving competitiveness and efficiency, at the same time as cutting their debt. The Spanish banks are doing just that.
The current political scenario in Spain requires us to highlight some points about our country, using as a starting point the Bank of Spain’s interesting analysis called: “The impact of the uncertainty arising from the political tensions in Catalonia”.
Financial institutions, companies and households have continued to adjust the debt accumulated in the first half of the year. In the case of non-financial companies and households, their level of debt is increasingly closer to the European average, against a backdrop of greater economic growth and preference for home ownership.
Housing prices have grown 16% since end-2014, according to the Bank of Spain. This is after a decline of 37% in nominal terms (45% in real terms) since their peak at end-2007.
Foreign investors have increased their leadership in terms of how many shares they own in Spanish listed companies. They held 43.1% of the total at end-2016.
The European bail-out of our banking system saved its skin. Now, a decade later, parliament and the Bank of Spain are investigating what happened.
The deadlines for the merger of Bankia and BMN will be accelerated once it has been confirmed there is no interest on the part of other investors. The tie-up is expected to be completed after the summer and will be the starting gun for the next round of sector consolidation.