Spain's Bad Loan Ratio Rises To Near-Record High

(RTTNews) - Spanish banks' non-performing loans increased further in May and reached close to last year's record high, signaling that the problems facing the recession-stricken economy is worsening.

A statement released by the Bank of Spain Thursday showed that doubtful debts held by financial institutions increased to EUR170.23 billion or 1.21 percent of the total loan. The bad loan ratio has reached near the record high of 11.23 percent seen in November last year.

The May value was higher than EUR 167.09 billion or 10.87 percent recorded in April. In March, the ratio was 10.47 percent. Bad loans have risen sharply since the Spain plunged into an economic crisis five years ago.

Meanwhile, total loans decreased 12.73 percent to EUR1,519.18 billion in May, in a clear sign that demand for credit has fallen sharply in the Spanish financial sector.

Government data released last month showed that mortgages on Spanish properties fell sharply by 17.5 percent year-on-year in April, with loans on residential properties recording an 18.1 percent decline.