Number of unpaid loans rises sharply at end of April

The number of unpaid loans owed to banks and other financial institutions rose sharply at the end of April, with the delinquency rate standing at 8.72 percent for the month compared to 8.36 percent in March, the Bank of Spain announced on Monday.

This rise of 0.36 percentage points — equivalent to 4.772 billion euros — is the largest monthly increase on record since January 2009.

Financial experts consulted by Efe news agency believe that consumers and businesses will continue to fall behind on their monthly payments for the rest of this year as Spain’s recession is expected to continue, which could see the banking sector break a historic record by the end of 2012.

Experts believe that the arrears problem won’t get any better until there is an improvement in the economy and unemployment begins to fall. But that, they say, won’t occur until about 2014.

The new Bank of Spain data comes a week after the government asked its European partners for up to 100 billion euros to clean up the country’s financial system. The figures also confirm that an important part of the financial sector is facing serious problems, caused mainly by the bursting of the property bubble that formed during the past decade.

Experts warn that bad debts will continue to rise, even comfortably exceeding the nine-percent mark. The record to date is 9.15 percent registered in February 1994 following the government’s intervention of Banesto bank, when regulators discovered a shortfall of 3.636 billion euros.

The number of personal mortgage payments considered late rose to 3.07 percent at the end of the first quarter in 2012, three decimal points higher than the same period last year.

Of the 295.696 billion euros owed to banks by real estate agents, 67.42 billion were considered to be in default at the end of the first quarter of 2012.