trending Market Intelligence /marketintelligence/en/news-insights/trending/ugaAKhobf4z007q2Ud0Lfg2 content
Log in to other products

Login to Market Intelligence Platform


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

Thank you for your interest in S&P Global Market Intelligence! We noticed you've identified yourself as a student. Through existing partnerships with academic institutions around the globe, it's likely you already have access to our resources. Please contact your professors, library, or administrative staff to receive your student login.

At this time we are unable to offer free trials or product demonstrations directly to students. If you discover that our solutions are not available to you, we encourage you to advocate at your university for a best-in-class learning experience that will help you long after you've completed your degree. We apologize for any inconvenience this may cause.

In This List

Spanish banks' profitability still low, credit risk on rise, Bank of Spain says

Street Talk Episode 68 - As many investors zig away from bank stocks, 2 vets in the space zag toward them

Street Talk Episode 66 - Community banks tap the debt markets while the getting is good

Street Talk Episode 67 - Veteran investor tabs Mick Mulvaney to help with latest financial stock-focused fund

Street Talk Episode 65 - Deferral practices trap US bank portfolios in purgatory

Spanish banks' profitability still low, credit risk on rise, Bank of Spain says

Bank of Spain Governor Pablo Hernández de Cos said one of the main challenges the Spanish banking industry currently faces is restoring profitability, and warned the industry about the rising consumer credit for durable goods.

Even though Spanish banks' profitability is higher than the European average and returned to positive values — having grown 7% as of June 2018 — it is still below pre-crisis levels and is lower than other developed-economy banking systems.

In a speech at the 14th banking industry meeting on Dec. 12, the governor said the drivers of low profitability are unproductive assets and the interest rate, which has squeezed lenders' net interest income.

However, he said low interest rates impacted profitability the least when compared to the other factors.

"The actions to be taken to recover profitability should be based on accommodating the expenses to the new size of the balance sheets, looking for alternative sources of income and improving efficiency," Hernández said.

He highlighted the 15% growth in consumer credit for durable goods so far in 2018 — along with the rate of defaults rising in tandem that he considers warning signs.

"It would not be acceptable for the search for an alternative source of income in the short term to become once again a potential source of future losses," Hernández said.

Hernández said the situation in consumer lending indicates that banks have eased their risk acceptance and selection standards. He said "past experience has shown that loosening credit standards eventually leads to notable increases in default rates," and added that these lessons should not be forgotten.

Price-setting policies are instrumental in ensuring an appropriate risk-adjusted profitability, he said, and these policies must be "consistent, comprehensive and rigorous."