NPL disparities spell trouble for Spanish lenders

Louise Bowman
Published on:

Concerns for mid-tier banks as AQR looms; Likely that additional provisioning needed

In July 2012 US-based Oliver Wyman and German strategy consultant Roland Berger published a then much-anticipated set of stress tests on the Spanish banking sector. The exercise was undertaken to calm market fears over the eventual losses that the banks might face on their problem exposure, primarily to real estate lending. The two determined that the sector faced expected losses of between €170 billion and €190 billion under a base scenario and between €250 billion and €270 billion under an adverse scenario between 2012 and 2014.

Corporate losses...