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The CAM Bank, who were nationalised after being taken over by the Bank of Spain earlier this year, have reported how over half of the loans that it has made to property developers are now in default.
Caja de Ahorros de Mediterraneo was unable to meet core capital requirements set by the European Commission in June, and as such needed to request an injection from Spain's Fund for Orderly Bank restructuring (FROB) of 2.8 Billion Euros, which effectively privatised the Caja.
Last month the caja posted a first-half loss for 2011 of 1.14 Billion Euros.
CAM explained these losses yesterday , saying how of the 12.7 billion euros lent to developers, a total of 6.4 billion euros of this had been classed as being ‘high risk', with a further 1.3 billion being classed as ‘substandard'.
The Alicante-based caja also reported how a total of 5.4% of its 1.1 billion euros of residential mortgage loans were also under default.
The Bank of Spain is now trying to find a suitable buyer for the Caja.
