Spanish banks tighten the granting of credit to SMEs but not to large companies

In the rest of Europe the criteria were tougher for both segments, but in Spain this difference occurred during the first quarter of the year.

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Spanish banks continue to toughen the concession criteria that they require from clients (individuals and companies) when granting them credit. This has happened again in the first quarter of the year, especially in the SME segmentAs in the case of the largest companies, conditions remained stable.

These conclusions come from the Bank Loan Survey of the Bank of Spain, published this Tuesday, which also reflects that the situation in Spain contrasts with that of the entities of the entire Monetary Union, where there was a hardening in both segments.

Regarding the maturity of loans, the supervisor’s conclusions reveal a “certain tightening” in long-term loans, while those with a shorter horizon would not have experienced significant variations.

Increased risks

This action on the part of the banks is due to a increased risks that entities are perceiving as a consequence of the economic situation and the uncertainty about the end of the pandemic and the solvency of the most affected companies, especially SMEs, which have the worst prospects in this regard.

All in all, during the first quarter of the year demand for loans dropped in a generalized way in Spain and the euro zone, although to a lesser extent in the latter case, according to the Bank of Spain.

Facing the next quarter, the second of the year, the entities expect that the tightening of loan conditions is maintained, although moderately, while they believe that demand will pick up in Spain and the euro zone in all segments.

On the other hand, as the Bank of Spain explains, terms The general results of new operations would have relaxed slightly in the first three months of the year, which translates into a decrease in the margins applied by some banks on ordinary loans, something that is explained by the lower financing costs of the entities and the greatest availability of funds.