Spanish banks are now bigger and solvent, are better capitalised and have made a massive consolidation effort estimated 250,000 million euros in the last five years, 25% of GDP, including assets transferred to Spanish bad bank Sareb. In that effort is included the closure of almost 12,500 branches and 58,000 employees less.
After the completion of the restructuring, the hard part is needed to be done now: managing the strictly banking business to be profitable again. Lately, banks have saved the face driven by the good results of financial operations and extraordinary gains. Now they need to increase their deposits, with an unemployment rate of 25%, and to grant more loans, what they are doing little by little.
The bank restructuring had as main target to direct a stable allocation of credit throughout the economy, something that has not happened yet. According to latest data from the Bank of Spain the financing to companies fell again in July despite the good activity data of the second quarter. The new loan to societies accumulates a decline of 209,090 million euros so far this year.
Oddly, the statistics reflect that new loans of one million euros (those traditionally associated with SMEs but not necessarily have to match only with this segment) are showing better performance lately, although the SMEs survey data do not go in that direction.
The new bulletin of defaulting and corporate financing, which Afi prepares for Cepyme and for the General Directorate of Industry, includes a survey of more than 1,000 Spanish SMEs and the results are quite disappointing: funding costs have increased for 46% of the companies surveyed and only 26% of them attempted to access bank financing. In addition, the volume of financing has been reduced for the 30% of companies and almost 60% of them are supporting an increase of their expenses and commissions.