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Some
rather shocking delinquency numbers (to mainstream media readers but not
readers of Mish, Acting Man, Zero Hedge, Max Keiser, the
Slog etc.) have surfaced in Spain.
Courtesy of Google Translate please consider The default property is
multiplied by ten since 2008.
Upfront Notes:
1.
The following
translation is somewhat choppy, and I present it as is.
2. Recall
that decimal points "." in Euroland are
the equivalent of commas "," in the US. Thus "62.366 million"
should read as 62,366
million or 62.366 billion euros.
3.
Many of the following
just released numbers are as of the end of 2011. Rest assured numbers as of
the end of the first quarter of 2012 are much worse.
With those notes out of the way, please consider the following translation.
Since
the crisis began in 2008, the Spanish financial sector accounts have been
seriously damaged by late payment of real estate companies, which rose from 1.98% in the first quarter of this year to 20.9%
it closed 2011.
According to recent data published by the Bank of Spain of 298.267 million
euros to the Spanish financial institutions were granted at the end of last
year to real estate companies were delinquent 62.366 million, a figure that
grew by 4.789 million in one quarter. In fact, between July and September
2011, the delinquent real estate companies stood at 18.97%, as there were
57.577 million euros a portfolio outstanding of 303,506,000.
As for the interannual evolution, real estate
delinquencies rose seven basis points from 13.98% recorded in the last
quarter of 2010 to 20.9% one year later, for a real estate loan portfolio
totaled 315.782 million then , which fell in that period 17.605 million.
The Bank of Spain data also reflect strong growth in the delinquency of
construction firms, and ended the year with 17.65% of outstanding claims,
well above the 12.12% they had in December 2010. Compared to the previous
quarter, the difference was just over one and a half points, as it stood at
16.09%.
The real estate and construction activity has gone from being the main driver
of the Spanish economy its biggest drag in just four years, as has happened
with the accounts of banks, which carry a much lower overall arrears of these
depressed sectors .
In particular, late payment of credit extended by banks, savings banks,
cooperatives and credit institutions closed 2011 at 7.61%, its highest level
of the previous 17 years, particularly since November 1994 when it stood at
8%. This rise in defaults is a result of increased bad debts, which in
December 2011 reached the EUR 135 838 000 134 227 000 compared to November,
according to Bank of Spain.
Of that amount, the questionable real estate and construction touched the
80,000 million euros, standing at 79.759 million, which means that 58.7% of
defaults across the Spanish financial sector came from this sector. But the
situation was much worse a year ago, as the unpaid real estate accounted for
73% of total bank dubious, almost three quarters of the portfolio
outstanding.
Meanwhile, the total credit portfolio of banks, savings banks, cooperatives
and credit institutions fell to 1.782 billion euros in December, from 1.785
billion that were awarded in November.
Most mainstream media
is woefully late in reporting this kind of news even though it is generally
available with a bit less of a lag in Spain.
More importantly, some of us have predicted this catastrophe far in advance.
Thus, what is shocking to many Johnny-come-lately analysts is simply a
realization of what had to happen.
A few of us insisted from the get-go that Greece, Spain, and Portugal would
all blow sky high, and that process is clearly underway now. The party is not
over yet because those countries, and perhaps even
Italy are destined to leave the Eurozone (or extract equivalent punishment
out of Germany, Austria, the Netherlands and France).
Mathematically this must happen, so it will. Delays and bailouts will
increase the costs.
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