Recent Trends in the Spanish Banking Sector

Abstract

The decline in lending accelerated in 2023Q1, with a significant drop for SMEs. The pace of loan repayments has accelerated in most segments. Interest rates on new loans for house purchase and to NFCs are in line with the Euribor, unlike those on new deposits. Higher interest rates will entail a further repricing of mortgages in 2023. Non-performing loans continued to decline, although the NPL and stage 2 ratios stabilised in the quarter. The outstanding balance of ICO loans declined in recent quarters. Listed banks’ earnings grew notably in 2023 Q1, driven by higher net interest income.