Total lending for the Spanish banking system 2010-2021

Total lending for the Spanish banking system decreased overall during the period under observation, falling to approximately 1.5 trillion euros as of 2018, a value that recovered slightly during the three following years. The highest total value of lending in the Spanish banking system was registered in 2010, over 2.1 trillion euros. In 2019, nearly 46 percent of lending was channeled towards house mortgage loans, and 42 percent of lending was distributed to non-financial corporations.

A country of homeowners

The remarkable weight of house loans within the lending market derives from the fact that, traditionally, Spain has been a country of homeowners; as of 2019, the home ownership rate was roughly 76 percent. Furthermore, over a fourth of Spanish households own their property with a mortgage or outstanding loans. Nevertheless, the number of house loans have remained relatively low in the past decade in comparison to the years of the housing bubble. In 2020 this number was at mere 333.7 thousand.

Better lending practices

In response to the economic crisis, stricter financial regulations were implemented in EU countries and the household debt in Spain declined to more sustainable levels. These and other factors resulted in healthier performances within the Spanish banking sector and its lending practices, as several indicators demonstrate. The loan-to-deposit ratio (LTD), which measures the liquidity of a bank through the ratio of the funds it has in its deposits to the volume of loans granted to customers, fell from 150 percent in 2011 to 102 percent in 2021. In addition, the non-performing loans (NPL) to total gross loans ratio, it fell to just 2.85 percent by the end of 2020, which marks its lowest percentage since 2009.