The first half of 2018 has closed with positive figures for Spanish banking institutions as well as for loan applicants, since doubtful loans have reduced their level to 4.1% according to a report from the European Commission.
The fact that there is a lower number of non-payments on loans, means that there is a better solvency in borrowers and therefore, there may be better credit behavior and less delinquency, entities can increase the number of loans granted and offer more amounts high. Do you think this will make the bank trust more customers?
What are they?
According to European supervisors, a loan is considered doubtful when there are indications that the applicant will not be able to repay it due to financial incapacity or financial problems or when more than 90 days have passed since the borrower has not paid the agreed installments of the loan in a responsible manner.
It is also known as a failed loan or simply as an unpaid loan since in short, it refers to loans with a risk of default or with a default of more than 90 days.
The reduction of doubtful loans in Spain
According to a report from the European Commission, the level of failed loans in the first half of 2018 has been reduced by 1.2 percentage points compared to the same period of the previous year. This means that the level of unpaid loans from Spanish banks has remained at a level of 4.1%.
According to statements by the vice-president of the Commission for the Euro, the reduction of doubtful loans in Spain is progressing, which is encouraging and positive for Spanish banks, as it indicates that defaults will be gradually reduced.
They also descend in the European Union
Regarding the situation in the European Union, the figures are also positive. The first half of 2018 has been closed with a level of doubtful loans of 3.14% compared to 4.16% the previous year.
Although there are EU countries that continue to accumulate a high level of unpaid loans, highlights the data of the end of the second quarter of 2018 in Greece, which indicate that it had a ratio of 44.9% of failed loans.
Possible European projects
The European Commission has prepared a working document that contemplates the possibility of creating a platform within an electronic market in which both banks and investors can trade with doubtful loans and their corresponding portfolios.