Credit latest publications
May could represent a turning point in the dynamics of credit to the NFPS, with a smaller contraction than the one in April and a better performance of the portfolios that comprise it. An improvement in the activity and employment indicators in the medium term would consolidate a better performance in the credit market.
More than year after the start of the pandemic, the number of non-performing loans (NPLs) in the Spanish banking system continues to fall, though at a slower rate than before.
Banco de México reiterated the resilience of the financial system in the face of the adverse shock of the pandemic, as credits granted remain weak (-8.8% YoY in April) and levels of bank deposits remain close to historical highs.
In April 2021, the nominal annual contraction of current commercial banking credit to the non-financial private sector was -8.8% (-14.1% real). Despite the improvement in some indicators of economic activity, the different portfolios showed a lag in their recovery.
Bank credit to the private sector fell 7.9% in March due to the performance of the consumer and business portfolios, while demand deposits continued to drive bank deposits.
The banking system has maintained outstanding capital and liquidity levels, which up to now have allowed it to face the adverse effects associated with the pandemic.
The 2020 banking dynamics of lower credit granted to the private sector and a sharp increase in banking deposits were among the causes of better financing conditions for the banking system and a higher solvency.
Total credit granted to the non-financial private sector remains weak. It dropped again in January and was widespread across the country according to regional data as of 4Q20. Total deposits remained strong in annual terms in spite of a seasonal drop at the beginning of the year.