BBVA renegotiate terms of outstanding loans to prevent default

 

Spain´s Banco Bilbao Vizcaya Argentaria SA (BBVA) has renegotiated the terms of loans worth 900 Million euros worth 105,000 borrower struggling to pay their debts since 2008 in order for them to keep making the repayments.

The lender is also allowing borrowers to delay the payment of 30% of the capital until the end of a loan or increasing the duration of a mortgages to 40 years.

Many of Spain´s Banks are struggling with bad loans and are anxious to prevent further defaults on loans.

BBVA have reported that defaults have peaked, even as growth stalls in a Spanish economy that accounts for about 60% of the bank's lending. Of the 105,000 families helped to date, 45,000 were for mortgages, 44,000 were personal loans and 15,000 were business loans.

The bank currently holds around 11 billion euros in bad debt, equivalent to 4.9% of all of it´s lending within Spain, with provisions in place to cover just 42% of that amount. That compares to a bad-loans ratio for the Spanish banking industry as a whole of 7.16 percent in September, according to Bank of Spain figures.