MADRID Spanish banks, awaiting the first payments from a 100 billion-euro ($127 billion) European credit line, saw bad loans hit a new high in September, new data showed on Monday.
The new figures won't affect the euro zone aid, aimed at cleaning up the toxic real estate assets from the lenders' balance sheets, but reflect moves by the banks to be more realistic about the extent of their bad loans.
A recent independent audit of Spanish banks concluded that they needed capital injections totaling 60 billion euros to ride out a severe economic crisis.
"Non-performing loans are on the rise because of an exercise of recognition due to the (recent) stress test which has resulted in a very in-depth analysis and obliged lenders to come up with (more) provisions," said Jaime Guardiola, chief executive at Banco Sabadell (SABE.MC), who was speaking to reporters in Madrid on the sidelines of a banking conference.
Non-performing loans on the books of the country's crippled banks have risen steadily since a decade-long property boom ended four years ago, with the country now in its second recession since 2009 and one in four Spaniards out of work.
Bank of Spain data showed banks' bad loans stood at 10.7 percent of their outstanding portfolios in September, the highest level on record and up from 10.5 percent a month earlier.
Loans that fell into arrears increased by 3.5 billion euros from August, reaching 182.2 billion euros in September.
(Reporting By Paul Day and Jesus Aguado; Editing by Greg Mahlich)