Slowly, slowly, banks are disclosing their exposure to property credit risk and grounding to the real status of their spanish property business. The Bank of Spain worked out six months ago that it could be 181 billion and now the banks have the word.
Banesto announced the last week an exposure of € 10.3 billion related to property and assumed a loss of 21% – already there is 18% debt from borrowers.
Banco Mare Nostrum (BMN) has a 23% loan exposure and assumes a loss of € 4.2 billion, which is the higher so far.
Bankinter announced the last Friday that their risk exposure in hardly € 306 million, which is much lower than many other banks. It looks like Bankinter has a better quality property stock than other competitors and also the mentioned bank has a good provision (€ 990 m.) against their own risk.
Other banks will disclose their figures soon and we may find some shocking figures coming from them, with important presence in the coastal high streets.
The good exercise of transparency is disclosing the figures that major players (Bank of Spain, Government, EU and IMF) wanted to know in order to assess the real situation of the Spanish banking system.
Wisely, the Bank of Spain encouraged increasing the property loan provision to 30%, which provides a good back-up to the risk of bankruptcy.
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