Economy / Finance.- NPL rate in consumer credit climbs to 5.8% in the third quarter

Doubt on home purchase credit drops to 3%

MADRID, 3 (EUROPA PRESS)

The non-performing loan ratio for the acquisition of consumer goods from Spanish deposit institutions rose to 5.8% in the third quarter of 2020, two tenths above the June figure and its highest level in three years.

According to data from the Spanish Mortgage Association (AHE) collected by Europa Press, this rate is almost one point higher than a year earlier, when it stood at 4.9%.

The outstanding balance of consumer credit held by Spanish deposit institutions was 70,077 million euros at the end of September, 1.4% below the June figure and 1.31% higher than the third quarter of 2019.

Considering the doubtful balance, the increase is 3.08% compared to the previous quarter and 19.47% compared to September 2019.

Despite the two tenths increase in the NPL ratio among deposit institutions, for the financial sector as a whole, this indicator remained unchanged, at 5.6%, thanks to the fact that the NPL ratio for consumer credit in establishments credit finance companies (ECFs) fell by one point in the quarter, from 5.6% in June to 4.6% in September.

The outstanding balance of the consumer credit of the ECFs stood at 20,684 million euros at the end of the third quarter, 0.07% less than three months before and 6.15% below September 2019, of which 962 million euros corresponded to doubtful loans, 16.57% less than in June and almost 9% more than a year earlier.

CREDIT FOR THE PURCHASE OF HOUSING

Data from the Mortgage Association also show a decrease in the rate of doubtful loans to households for the purchase of housing granted by deposit institutions, which stood at 3% in September, compared to 3.2% of the three previous quarters and 3.4% from a year ago.

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In the case of credit from ECFs for the acquisition of housing, the doubtfulness rate remained at 14.2%, with which for the sector as a whole the rate stood at 3.3%, two tenths below of the second quarter and three tenths less than in September 2019.

In general, the outstanding balance of credit to households for the purchase of a house fell to 487,772 million euros, (-0.17% compared to June and -1.52% year-on-year), while the doubtful balance was at 15,899 million euros (-5.91% quarterly and -9.9% year-on-year).

THE EFFECT OF CREDIT MORATORIES

The Mortgage Association has warned that measures such as credit moratoriums that entities have put in place to help mitigate the impact of the coronavirus pandemic are assuming “an important relief” for credit institutions for accounting purposes, by allowing the authorities that do not have to provision these loans as doubtful risk on a temporary basis.

“Although the doubtful data during this third quarter of the year have registered a favorable evolution, better than expected, it is necessary to see in the coming months the evolution of the support measures and the result of the liquidity lines put into operation, especially once the deadlines are over, in order to be able to make a better assessment of the real situation of doubtful assets in the sector, “said AHE.

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