- Spanish Deputy Economy Minister Miguel Temboury
The amount of loans at Spanish banks that fell into arrears soared to a new high in September, due to the damage caused by the collapse of country's property market. According to the Bank of Spain, the proportion of Spanish banks' bad loans jumped 10.7% (to 182 billion euros), compared to a 10.5% increase in the ratio the preceding month. In the meanwhile, loans that fell into arrears rose by 3.5 billion euros. The European Union has previously lined up a 100 billion Euro rescue loan for the Spanish banking system, however, the government has yet to draw on the loan.
"Non-performing loans are on the rise because of an exercise of recognition due to the (recent) stress test which has resulted in a very in-depth analysis and obliged lenders to come up with (more) provisions," said Jaime Guardiola, chief executive at Banco Sabadell.
"It seems likely that we need less than 40 billion," Deputy Economy Minister Miguel Temboury said on Monday.
The Stoxx Europe 600 Index rose 2.18 per cent to 268.58. Germany's DAX Index added 2.49 per cent to 7,123.84, while France's CAC 40 Index soared 2.93 per cent to 3,439.58.
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