Spanish bank losses

IIF: Spain's bank losses could hit €260bn

Spanish bank loan losses could hit €260bn (£210bn), with the industry likely to need some €60bn euros in outside help to stay afloat, the International Institute of Finance said Monday.

The Telegraph,

21 May, 2012

Taking guidelines from how badly Ireland's banks were hit in its financial crisis, economists at the global banking institute said they expect the losses to be in the range of between €216 and €260bn.

"A number of factors suggest that the losses could be nearer the upper end of this range. Spain's macroeconomic prospects are worse than those faced by Ireland, especially as regards growth and unemployment," it said in a new review of the global economy.

"The bulk of the losses would be generated by the commercial real estate loan portfolio, which is concentrated in the cajas," the Spanish savings and loan banks, it said.

The IIF is an association of around 450 banks around the world and has been closely involved in the eurozone crisis, leading the negotiations for a write-down of Greece's private-sector debt in March.

The IIF said the banks were able through the end of last year to find enough capital internally to put aside €110bn for loan loss reserves, and some will be able to keep generating capital internally to meet needs. But not all of them.

"Substantial divergences between individual banks suggest that government assistance will be needed for a significant number of banks, mainly the cajas," the IIF said.

In the worst case, the IIF said the shortfall that would fall on the government would be about €50 and €60bn.

It said some aspects of the Spanish market might prevent the worst-case scenario.

"Mitigating factors, on the other hand, include more conservative lending standards than in Ireland, with lower ratios of loans to value. Real-estate lending in Spain, moreover, has not been as concentrated. Most banks, finally, have more diversified loan books."

Spanish Regions Face €35.8 Billion Payments Year-End

Spanish bank loan losses could hit €260bn (£210bn), with the industry likely to need some €60bn euros in outside help to stay afloat, the International Institute of Finance said Monday.

Fox Business,

22 May 2012

Spain's regional governments face debt maturities of nearly 35.8 billion euros before the end of 2012, El Pais reported in its Wednesday Internet edition, citing regions" plans submitted to the country's Budget Ministry.

Those maturities include short- and long-term debt, credits, loans and securities' issuances, the report added.

In addition, if another EUR15 billion for the financing of the expected 2012 regions' deficit of 1.5% of gross domestic product is added, regional governments will need to raise more than EUR45 billion this year, according to El Pais.

Debt maturities six years ago amounted to some EUR5 billion, the newspaper added.

Newspaper Web Site: www.elpais.com