MADRID, April 15 (Reuters) – Growth in Spanish banks’ lending income is expected to slow down in 2024 due to a gradual increase in deposit remuneration, while bad loans could rise due to the economic impact of global geopolitical tensions, the Bank of Spain warned on Monday.
In its semiannual financial stability report, the central bank urged lenders to use part of higher profits to set aside more provisions to potentially absorb future losses.
Spanish banks, which are mainly retail lenders, tend to benefit more from higher interest rates than their euro zone peers. They have had higher returns on mortgage loans, largely tied to floating rates, offseting a 3.4% decline in overall loans last year while keeping a lid on rates for savers.
As of February, Spanish banks offered an average return on one-year household deposits of 2.37%, compared to 3.2% in the euro zone as a whole.
Source: REUTER