BBVA and Santander close the Tap even more

If you need a loan, you should be thinking about changing country. If Santander recently announced its intention to cut credit by 10% in 2012 (and Banesto by 7%), a decision applauded by the governor of the Bank of Spain, now it is BBVA that turns off the tap: credit fell in Spain 6% in the third quarter and 2.4% in the first nine months of 2011, according to the results presented yesterday by the entity.

This drop is very striking because the bank chaired by Francisco González had assured until a few months ago that, unlike the rest of the sector, it continued to provide credit, especially mortgages. In fact, in some presentation of results, he got chest for the number of new mortgages granted.

But that has also ended in the second largest bank in Spain, which has been dragged down by the seriousness of the economic situation in our country. And there is not much to expect from the rest of the sector; certainly not from the entities that have received money from the FROB.

Whose fault is it? If we listen to the entities, of the lack of demand for credit due to the crisis. If we listen to companies, especially SMEs, to the battered situation of the banking system.

What is undoubted is that financing has skyrocketed - due to Spain's high risk premium, distrust between banks and the deposit war - that margins have plummeted and that banks continue to have to provision a lot because the delinquency continues to rise. If to this are added the higher capital requirements and the need to reduce its indebtedness (deleveraging), it is almost impossible for the banks to grant credit.

38.2% drop in profit in Spain

Apart from the credit stoppage, BBVA recorded a 38.2% drop in its profit in Spain due to a 17.2% drop in the net margin (mainly due to the decrease in credit, since the differentials with which increase) and to a 36.1% increase in losses due to impairment of assets, that is, provisions for bad debts and other losses.

Despite the credit restriction, the relationship between loans and deposits (the so-called “commercial gap”) has grown in our country from 181% to 189%; that is, it has 189% more credits than deposits.

This is due, according to the general director of the bank for Spain, Juan Asúa, to the fact that all the deposits captured by the entity have not been renewed in the bloodiest of the deposit war. which was released in the third quarter of 2010. According to Asúa, 90% has been renewed, but the remaining 10% is enough to worsen this gap, which increases BBVA's wholesale liquidity needs.