Spanish banks have reported a fall in the proportion of bad loans on their books in March, ending a five-month run of increases, the Bank of Spain said today.
Doubtful loans, which might not be recovered, amounted to €111.51 billion, or 6.11% of total assets, in March, down from 6.19% in February, the central bank said.
Bad loans represented 4.98% of total assets in October 2009 but they have piled higher since then as Spanish banks felt the impact of the collapse of the property bubble in 2008.
Under government regulations announced in March, Spain's listed banks are obliged to raise the proportion of rock-solid core capital they hold to 8.0% of total assets from 6% previously.
Banks not listed on the stock exchange must keep a core capital ratio of 10%.
Credit ratings agency Moody's downgraded Spain's credit rating by one notch to Aa2 in March and warned it may do so again on fears the government will be unable to meet its targets of slashing the public deficit and on concerns over the cost of restructuring the banking sector.
