Spanish banking system pulls property market to the bottom

Spanish banking system pulls property market to the bottom

Growth of  bad loans and prolonged recession drag the property market in Spain to the bottom. Spanish banks were forced to write off most of the debts in 2012 and lost 19 billion euros. In particular, Banco Popular has lost more than 2 billion euros. According to Nomura, the banks which took loans in early 2012 showed a net profit of zero.

Mortgages and loans for small businesses are a major headache in Spain. Performance in these areas will worsen in 2013, reported Reuters.

The Spanish authorities are asking the EU to borrow up 100 billion euros to fix the problems in real estate market and lending. Analysts expect good news on loans in 2014.