Are Spanish banks in trouble?

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This topic contains 35 replies, has 21 voices, and was last updated by Profile photo of Paul Paul 8 years, 4 months ago.

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  • #53577
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    Anonymous
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    The Spanish stock market has had its worst start to the year for over 20 years, the banking sector had held up reasonably well so far but now their quotes are falling dramatically, Bankinter fell 7%yesterday and is down another 2,77% today latest figures are as follows:

    En el sector de la banca, el mayor descenso correspondía a Banco Popular (-2,79%), seguido de Bankinter (-2,77%), Banco Sabadell (-2,38%), Santander (-2,00%), Banesto (-1,33%) y BBVA (-0,74%).

    The Spanish authorities lead us to believe that Spanish banks would be unaffected by the rubbish mortgage fiasco, seeing the pressure bank share prices are coming under made me wonder if this is another”Solbesism” from the house of the Cobbler.

  • #77348
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    Anonymous
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    135 years and waiting
    Suggest you look at banking stocks around the world including the U.K.
    Spain is not alone. 👿

    Frank 8)

  • #77354
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    Anonymous
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    @Just Frank wrote:

    135 years and waiting
    Suggest you look at banking stocks around the world including the U.K.
    Spain is not alone. 👿

    Frank 8)

    Exactly, there was an article in the mail about April last year based on the housing market crash in Spain because of the drop in the stop market and they forgot to mention every market in Europe took a drop.

    There closing line was at least it will stop Estate agents earning too much commission.

  • #77376
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    rt21
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    Does anyone know whether the Spanish Government provides any protection for depositors in the event of a run on a spanish bank ?

    Given the apparent lax lending of banks over there it wouldn’t surprise me if one or two banks are struggling

  • #77377
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    Anonymous
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    @rt21 wrote:

    Does anyone know whether the Spanish Government provides any protection for depositors in the event of a run on a spanish bank ?

    Given the apparent lax lending of banks over there it wouldn’t surprise me if one or two banks are struggling

    I spoke with our bank regarding this and was told a figure of around 9,000€. However I’m not sure any bank within the Euro zone would be allowed to just go to the wall without the central bank or the bank of that particular country guaranteeing deposits in some form, just like the Northern Rock episode.

    Something happened with Banesto a number of years back and BBVA took it over.

    What you also need to do is look at the rating of your bank which gives a guide as to how safe your bank is. The information is related to how you bank invests (% of high risk investments etc).

    Also have a look at something like DBRS credit reporting.

  • #77395
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    Anonymous
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    @ian_ok wrote:

    I spoke with our bank regarding this and was told a figure of around 9,000€. However I’m not sure .

    I believe the figure quoted is mistaken.

    In Spain our deposits are guaranteed up to 20.000 € per account by the FGD (Fondo de Garantía de Depósitos).

    I believe in the UK, as you are richer than us, the amounts guaranteed are up to 33.000 GBP.

    There is a very recent report by S&P rolling around on why the main Spanish banks are safer than their anglosaxon counterparts (namely BBVA and SCH) in the current market turmoil.

    However, Spanish regional savings banks are a whole different story as they have lent with lax criteria to local small/medium sized developers who may -or not- go bankrupt.

  • #77401
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    Thanks Drakan.
    @Drakan wrote:

    In Spain our deposits are guaranteed up to 20.000 € per account by the FGD (Fondo de Garantía de Depósitos).

    This is the website, not the most flashy website around…!
    http://www.fgd.es/

    @Drakan wrote:

    I believe in the UK, as you are richer than us, the amounts guaranteed are up to 33.000 GBP.

    In the UK it was 18,000 then from 18-around the 30 mark you get 90% after 30k keep your fingers crossed.

    However we all know what happened with the Northern Rock and they finally said they would cover 100%

  • #78113
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    Anonymous
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    Very interesting article on the website for the Daily Telegraph,about Spanish Banks. Just Google ; Daily Telegraph ; and it will come up, go over to the right hand of the page. I did n´t post it on here as I am not sure about copyright laws and do not want to get Mark into trouble, I do have a copy of the article which I can e mail on if it is removed from the web page. If anyone requires a copy email me and I will send it. It is also quite long, but very interesting.

  • #78114
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    Anonymous
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    Hi 135

    Yes really intresting report, just more evidence as to why the euro will weaken in the coming months.

    I will post the link 135

    I think the Telegraph will be glad of the publicity.

    http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/01/28/bcnspain128.xml

    Steve

  • #78117
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    Anonymous
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    Very clever. Spanish banks are dumping their credit risk on European tax payers. When mortgage delinquencies rise, as they will, the European tax payer (you), will be left holding the baby.

    Mark

  • #78120
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    Anonymous
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    Some countries take the advantages the EU has to offer. Not to do so would negate any reason for being a member state. There are many disadvantages for members, such as losing control of decision making and being forced into human rights issues plus many more too numerous to list, so dumping the ECB with a large hole in the mortgage market must give a member state wry satisfaction.

  • #78163
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    Anonymous
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    I’m pretty sure that if it wasn’t for the ECB’s repo window, we would have had a handful of Northern Rocks in Spain by now.

    By the same token, if Northern Rock had had access to the ECB’s repo window (at the time the BOE wouldn’t accept mortgage-backed securities), it wouldn’t be in the state it is now.

    Mark

  • #78165
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    Anonymous
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    so dumping the ECB with a large hole in the mortgage market must give a member state wry satisfaction.

    Say what you like about Spain they know how to squeeze every last drop of gravy from the EU gravy train. Money for windmills that do n´t work, roads that go nowhere etc etc etc ,disregard 98% of the gilipollezes from the EU .

  • #78170
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    Anonymous
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    Read that 140 banks had applied for emergency credit facilities from the ECB window, including “some of the largest” British banks including Barclays. It’s all been done very covertly.

    It’s not only the Spanish banks that are taking advantage of the cheap funding on offer.

    🙂

  • #78174
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    This might turn into a really big story. Full credit to Ambrose Evans-Pritchard of The Telegraph for spotting it.

    Think about it.

    Spanish banks and savings banks lend freely to Spanish developers, who build mind boggling amounts of poxy blocks of flats all over Spain, but mainly on the coast. Same banks then lend mortgages to buyers, who for some reason are inclined to buy said rubbish without a fuss. Banks then securitise those mortgages, and dump them on the ECB in return for €50+ billion lent at favourable rates. That’s what’s happened so far.

    What happens next? Let’s assume the Spanish property market tanks. Then the ECB is left holding the mortgages, the German tax payer wakes up to the bill, whilst Spanish banks, who created the problem, leave no skin in the game.

    If the market holds its ground, no problem. But that looks less likely every passing day.

    What can the ECB do to avoid being left holding billions worth of delinquent Spanish mortgages? Slash interest rates, refill the punch bowl, wake up the DJ, and try and get the party going again?

    If this problem explodes, it’s going to create a massive headache for the EU’s financial system. Perhaps the question should be ‘Is the ECB in trouble’?

    Mark

  • #78175
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    Anonymous
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    I would say the ECB are in a position not envisaged 12 months ago. That would highlight the fact that things are not going according to predictions.

    Measures will have to be taken to “stop the rot” so to speak and shed their risk, or alter EU financial markets by stimulating growth. This can´t be done without a change in fortune in the US economy.

    Germany will be looking at every posibility to re-write their contributions under seemingly emergency measures to avert serious pressures on their economy.

    It can only get worse until the US, who let´s face it, caused this problem through sloppy and complacent practises, get their financial frupas in order. In the meantime, the big players in Europe can be trusted to compound the problem by acting in their own interests instead of looking at the problem as a union. No amount of “safety through more members propaganda” ever works in a crisis!

  • #78189
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    Anonymous
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    Article today in the Spanish press about how Spanish bankers are unhappy with recent articles in the British press – primarily the Telegraph – questioning the health of the Spanish banking system. Needless to say, they find the criticism totally misguided and unfair.

    Mark

  • #78195
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    Inez
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    Really – then why are they withdrawing and tightening up their products?

  • #78201
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    Anonymous
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    I expect the Spanish banks to blame their current situation on Lewis Hamilton. After all, the market did seem to drop about the time Lewis put a halt to that much adored Spanish devine wind “Alonso”

  • #78209
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    Anonymous
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    Off the record I was told by a Polaris World rep that BancoPopular, CAM and CajaMurcia no longer offer mortgages on their properties.

    Also of note – CAM bank have set up CAM Mediterranean as their real estate arm to sell properties where the bank has invested in the development. As one of the managers said, “its for the bank to start liquidating some of its liabilities”. I thought his phrase was rather interesting.

  • #78211
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    Anonymous
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    APotter, was it a freudian slip, I´m sure he meant to say assets!!

  • #78214
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    Anonymous
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    The CAM Mediterranean website is quite a good site and user friendly.

  • #78215
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    Anonymous
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    Hi
    The banking system in the world is mainly in a mess. 😥
    The fact that they are tighening their belts and withdrawing products is what any senslble business would do or have to do in a credit squeeze. 😯
    Has anyone noticed the share prices in the U.K banking lately and just who thinks that the U,K government and economy is any better placed than the Spanish at the moment if a full recession hits.

    Frank 8)

  • #78217
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    Anonymous
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    its brilliant

    Wish I was a Spanish bank

  • #78219
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    Anonymous
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    @peter Good wrote:

    APotter, was it a freudian slip, I´m sure he meant to say assets!!

    ..or, more accurately, “steadily depreciating assets”!

  • #78223
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    Anonymous
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    If the Asset is not performing. It become an off balance sheet liability.

  • #85300
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    Anonymous
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    I have an account with Solbank but am unhappy with the service and charges. I have been recommended to BanCaja. Any views anyone?

  • #85306
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    Anonymous
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    APotter wrote:
    Off the record I was told by a Polaris World rep that BancoPopular, CAM and CajaMurcia no longer offer mortgages on their properties.

    Also of note – CAM bank have set up CAM Mediterranean as their real estate arm to sell properties where the bank has invested in the development. As one of the managers said, “its for the bank to start liquidating some of its liabilities”. I thought his phrase was rather interesting.[/quote;

    I can understand the attitude of the Banco Popular,CAM and Bancaja, I would n´t want to offer mortgages on their properties.

  • #85308
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    Anonymous
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    The sad part is that surely people in senior positions with banks, central banks, goverments, etc. etc. should have seen this unfolding long before it happened! perhaps they did!

    However whilst worldwide hundreds of thousands if not millions are and will be effected losing their jobs, houses or both, those responsible will remain relatively unafected on their huge 6 figure salaries and protected pensions. Where is the accountability?

  • #85309
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    hudson wrote:
    I have an account with Solbank but am unhappy with the service and charges. I have been recommended to BanCaja. Any views anyone?

    In my experience banks exist with one purpose in mind to extract as much money from unsuspecting customers as possible.

    Spanish banks and their charges are as transparent as lead ,charges are applied knowing that most people will not question them and those that do obtain some sort of refund.

    An example of Spanish banking mentality. A friend of mine decided to return to the UK, she asked the bank how much it would cost to transfer quite a large amount of money to the UK, the fee was exhorbitant let us say. She then approached one of the British companies specialising in handling transfers to UK, although it did n´t exactly match the claims of their adverts it was a lot better the CAM Bank had quoted her. She wrote a cheque to company on her CAM account. This is where I come in , she had left my phone number with the CAM Bank in case of problems .

    One morning my phone rang it was the CAM they wanted to speak to my friend , who I shall call Rachel. I explained that as they knew Rachel had moved back to the UK and would live there most of the year but as she still owned a flat would come out here several times a year. The conversation went something like this:

    CAM clerk (CAMcc) ” Rachel has written a cheque for xxxxxx euros, WE want to know what it is for.”

    Yours truly(YT) I am sorry this is private information,although I know the facts you really should not be dicussing it with me”

    CAMcc “Is the money going to Barclays Bank? We can match any offer they have” At that time Barclays was advertising an income scheme which looked very good, but on reading the small print with a magnifying glass it was not so good.

    YT “I have already explained that you should not be discussing this with me, I can only suggest you phone Rachel in the UK.”

    To my surprise CAMcc agreed to do this.

    I called Rachel to warn her that Miss Gatlin gun (CAMcc) would soon be on the warpath.

    I called Rachel back later , she had been put through the third degree by Miss Gatlin gun(CAMCC),the final shot across the bows was “We would have made the transfer for nothing if you had asked US.” But as I pointed out to Rachel, what exchange rate would they have given? There is more than one way to skin a cat.

    In conclusion I will finish with a quote from Thomas Jefferson , he certainly knew a thing or two about life.. The world banking system is in a mess due mainly to mismanagement by governments , but the bankers who exert enormous pressure on politicians also have a large share of the blame on their shoulders. They may not control the supply of money but they do have a large influence.

    Thomas Jefferson’s Warning To America :

    “I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.” Written by Jefferson in a letter to the Secretary of the Treasury Albert Gallatin (1802).

  • #85325
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    Anonymous
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    Mark – we have a tidy sum of Euros currently sitting in the Royal Bank of Scotland Gibraltar. I assume this is covered under UK Law? Thanks.

  • #85329
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    Anonymous
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    Hello Cath -I think that you are making a dangerous assumption. I have never done business with RBS Gib, but I would assume that they are a separate legal entity from RBS in the UK high street. In practice at least it is clear that the Gib banks operate very differently from banks in the UK and are a lot less efficient.
    Given that the Gib banks have a high exposure to Spanish property and some of them have even stopped offering mortgages, I would think it prudent to split the money and open an account elsewhere -perhaps back in the UK where you are likely to be much better protected.

  • #85330
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    Anonymous
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    hey i am thinking the best place for any investment is under the bed !! who can you trust ? 🙄

  • #85370
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    Fuengi (Andrew)
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    @hudson wrote:

    I have an account with Solbank but am unhappy with the service and charges. I have been recommended to BanCaja. Any views anyone?

    solbank have ALOT of additional charges.
    Banesto is quite cute with some of its charges aswell. recently attempted to charge a friend 3% for paying back sum owed on her credit card. She threatened to close the account, and they backed down to 1%
    Myself i use banco de andalucia. there are a few charges, but they are very minimal all in all. Transfer charges also seem decent. 500 euro transfer, cost me an additional 1euro.

  • #85400
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    Forestfire – probably right; I’ll have to investigate more and let you know. These days, it’s a real problem isn’t it???

  • #85405
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    Paul
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    Any Spanish Banks bankrolling the likes of Fadesa and Ferrovial for example are very likely to be in trouble themselves.

    Apart from the apparent cheapness of Alliance and Leicester I think it strange that Santander should want them as well as the Abbey, after all Alliance and Leicester are one of the UK Banks who have mega worries over sub-prime and buy to let mortgages, Santander might just regret purchasing them one day.

    Most Banks worldwide are not immune to major financial problems right now, including Spanish Banks.

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