MADRID, Dec 19 (Reuters) – Consumer lending in Spain has hit levels not seen since the eve of the global financial crisis, reflecting both the Spanish economy’s strength and a shift in focus from mortgages to more profitable but riskier credit among the country’s banks.
Lending in Spain plummeted after the 2008-2009 crisis, but consumers have been emboldened by the Spanish economy, which has grown at double the rate of the European Union average this year with expectations it will outpace the bloc again in 2026.
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Sabadell’s performing consumer loan book rose 19% year-on-year as of September, above a 5.6% mortgage loans increase.
SPANISH POPULATION REACHES RECORD
Gaztelu said a jump in the workforce since the end of 2019 was driving lending, as an influx of foreign workers pushes Spain’s population to a near 50 million record.
New consumer loans reached almost 4.5 billion euros in October, a 21.8% year-on-year rise and the highest monthly total since 2007, official data shows.
That stands in contrast to the wider euro zone – an ECB lending survey in October showed a moderate tightening for consumer credit because of concerns about the economic outlook.
Renta 4 analyst Nuria Alvarez said consumer credit would be a key driver for Spanish banking profitability in 2026, alongside corporate lending, asset management and insurance.
BAD DEBT RATIOS TICK HIGHER
Unsecured consumer lending can be risky for lenders.
Bad debt ratios on these loans rose to slightly above 4% in October – almost twice as high as defaults on mortgages – but a far cry from the 8.3% peak in June 2009.
The appeal for banks is clear.
Returns on consumer lending averaged almost three times the 2.67% earned on mortgages in October, central bank data shows, with mortgage returns squeezed by falling interest rates.
Spanish banks’ overall consumer loan books rose 7.2% year-on-year to 105.9 billion euros at end-June, just below their all-time high reached in July 2008.
Consumer credit accounts for 8.7% of overall lending, up from 8.3% last year and 5.8% before the crisis, a Reuters analysis shows.
Unicaja plans to double its new consumer loans by 2027.
Spanish consumer credit hits near 18-year high on economic boom
