Neither the rise in inflation, which rose on average close to 8.5% last year, nor the fastest rise in interest rates since the euro came into existence (250 basis points between July and December) have been reflected in the delinquencies of banking, which fell again in November to reach its lowest level since the end of 2008, at 3.68%. The data published this Monday by the Bank of Spain (BdE) reveal that this fall occurred with an increase in the credit portfolio to 1,231 trillion euros (from 1,223 trillion the previous month).
At the same time, delinquent loans had been reduced to 45,383 million, 665 million less than those registered in October. Compared to November 2021, credit delinquency has gone from 4.29% then to 3.68% now, and the balance of doubtful loans has decreased by more than 7,200 million, since then it was close to 52,600 million.
In addition to the total data for the sector, the Bank of Spain publishes each month, on the one hand, the aggregate delinquency of banks, savings banks and cooperatives -rural and professional savings banks-, and, on the other, that of consumer finance companies. In this way, it can be observed that the delinquency of banks, savings banks and cooperatives fell from 3.68% in October to 3.59% at the end of November, which is also the lowest rate since December 2008 and confirms the thesis of the entities that they are not noticing an increase despite the worsening of the economic situation.
Slight increase in default on consumer credit
The fall in delinquency occurred at the same time that the credit portfolio increased slightly, to practically 1.18 trillion euros, while the balance of non-payments fell to 42.367 million, some 730 million less. Regarding consumer finance companies, the ratio, however, continued to worsen, going from 6.35% in October to 6.37% in November, with a volume of doubtful loans of 2.831 million, above the 2.762 million of the last month. These types of credits are the ones that experts and economists always focus on because they are usually the first to reflect an increase in defaults when the economic cycle worsens.
In addition, delinquency grew despite the fact that the credit portfolio increased to 44,422 million, almost 900 million more than in October. As regards the provisions or “cushion” of capital with which entities deal with possible impairments or insolvencies, in November it continued to drop to 32,238 million.