Luis de Guindos, Spain’s new minister for competitiveness and the economy, has told the Financial Times that Spain’s banks will need to provision an additional €50 billion against their bad real-estate assets.
This will come as little surprise to those in the market, as hidden losses of this magnitude have long been assumed, having been identified in June in a report, published by The Boston Consulting Group. De Guindos is, however, surprisingly cavalier about Spain’s real-estate problems, stating:
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Hmmm – €176 billion of bad loans on dodgy real estate will take quite a lot of managing. He caveats:
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You can say that again.
For more on how Spain’s banking sector is attempting to deal with its problem real-estate loans, see ‘Property crisis drains Spain’s hopes of recovery’ in the December issue of Euromoney magazine.
