The credit for families and businesses far from being opened is closed down. As per the recent details by the Bank of USA, those for May, the balance of financing to families stands at 885,428 million euros, chained its sixth consecutive monthly decline and, for the first time, exceeds 1% of interannual fall.
The evolution of business loans is not much better. If in January the balance presented an interannual increase of 1%, in May, after registering progressive decelerations month by month, it falls by 0.3%, a negative variation that did not occur since August of last year.
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The sluggishness of credit is explained in a context in which both families and companies continue with their deleveraging process and financial institutions, with difficulties in obtaining funds in the markets, with higher capital requirements and facing decreasing interest margins, they are not in a position to reactivate the offer of loans.
About households, housing loans fell by 0.3% about May 2010, and the balance stood at 674,927 million euros.
These loans, whose total balance only grew in 2009 and 2010 by 0.2% and 0.7% respectively, peaked in July last year when it stood at 680,760 million. From that month until the end of the year, the balance, which is the result of the variation experienced by the total portfolio due to the outflows produced by amortizations and the income from the production of new loans, only decreased by 460 million euros, to close the year at 679,868 million euros.
But this year two stimuli that credit claimants had last year have disappeared. First, it changed the VAT and raised two points in July, which accelerated the closing of tasks previous to the entry into force of the new rates. In the second place, in 2010 the tax relief for the purchase of housing for income higher than 24,000 euros disappeared.
According to experts, these two factors led to the advancement of home purchase operations and, therefore, contribute to the reduction of the total balance in the following months, as fewer new operations are carried out. The checkup of the first five months of 2011 confirms this thesis since from the end of the previous year to the end of May, the financing balance for housing has decreased by 4,941 million.
The worst data
As for loans destined for purposes other than housing, the balance of May, of 207,131 million, registers an interannual decrease even more marked than the mortgage, since it decreases by 3.8%, the worst data since the beginning of the crisis.
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Since the end of the year, the balance of this type of financing has decreased by 8,145 million euros, which corresponds to the collapse of the new operations of these loans.
About financing for companies, the balance stood at 1.29 trillion euros in May, which represents a decrease of 20,153 million concerning that registered at the end of the year.
In January, according to data from the Bank of Spain, the balance of non-financial corporations registered a moderate year-on-year increase of 1%, but this was the most expansive figure in two years. However, as the year progressed, the year-on-year rate was losing steam until it entered negative territory in May.
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Of the total financing to companies, the credit relates to a decrease in its balance of 2.2% in May, the highest since July 2010, standing at 874,110 million euros. At the finish of the year, it was 897,468 million, so the decrease in the balance reached 23,358 million.
Financing through securities other than shares, such as debt issuance, nonetheless recorded a year-on-year increase of 5.5%, although this growth was double digits until March, in 2010 it was around 15%, and The previous year registered an increase of 36.9%.
The contraction of credit to families and businesses, therefore, far from improving, threatens to present the worst records since the beginning of the crisis if the trend is not altered in the coming months.