Spanish Business News

Santander has revealed a 35% fall in annual profits after the group took extra provisions for deteriorating real estate assets in Spain.

The bank announced a net profit of 5.35bn euros ($7.05bn; £4.48bn) for 2011, down from 8.18bn euros in 2010.

It said it had made a 1.8bn euro provision against property exposure in Spain and had written off 600m euros relating to its businesses in Portugal.

Spain has struggled since its property bubble burst in 2008.

Banks took on land holdings from bankrupt developers, but have struggled to offload most of their property assets.

Economy minister Luis de Guindos has said new provisions to cover losses on real estate assets could cost Spanish banks up to 50bn euros.

Read the full article at the bbc

I've just been reading that investment bank JP Morgan is predicting that unemployment could reach 27% in 2012.  Citigroup is also predicting further rises to the unemployment levels, with Citigroup expecting it to reach 26%. 

The unemployment rate currently stands at just under 23%, or 5.3 million people.  Truly mind blowing numbers!  When will the Spanish finally twig that this is not a price worth paying to be part of the euro zone?

Spain's central bank said the debt-laden country will fall back into recession this year with the economy contracting 1.5pc.

It looks like the Spanish bank run has started, with Spaniards withdrawing billions from banks last year due to fears about the Spanish banking system and a possible return to the peseta.

According to the Telegraph, in the 11 months to November 2011, "€48bn, equal to just under 3pc of total Spanish bank deposits" was withdrawn from Spanish banks and cajas.  So it looks like the Spanish are starting to do what the Greeks and Irish have been doing over the last couple of years.  So far it looks more like an invisible bank run at the moment.  There haven't been any Northern Rock style queues outside the banks.  At least not yet....

It seems wise to keep as little cash as possible in the Spanish banking system, just to be on the safe side.  This is what I have been doing and most of the people I know in spain, both Spaniards and expats are doing exactly the same.  At the end of the day, you don't want to end up with a pile of worthless pesetas do you?

Prime Minister Mariano Rajoy may need to skirt Spanish law to backstop the nation’s indebted regions, mimicking the European Union’s dodging of its no- bailout rule to save Greece, Ireland and Portugal from default.

“We consider the Spanish government should guarantee or take responsibility for the debt it has authorized the regions to issue,” said Albert Carreras de Odriozola, Catalonia’s deputy finance chief, in a telephone interview. “It must be possible to talk and find a mechanism.”

Catalonia, Valencia, Andalusia and Madrid, which account for 60 percent of Spain’s economy, are shut out of markets as they brace to repay 9 billion euros ($11.5 billion) to lenders this year, according to data compiled by Bloomberg. Spain’s 10- year yield has risen to 5.3 percent from 5.09 percent on Dec. 30 when the government said its 2011 deficit had ballooned to a third larger than its target.

Regional shortfalls drove Spain’s deficit to 8 percent of gross domestic product, breaching the 6 percent pledged to the EU. Spain’s Parliament today examines 15 billion euros of tax increases and spending cuts announced by Rajoy’s government on Dec. 30 to compensate the slippage.

Read the full article at Bloomberg

The scandal of a "ghost" airport in Spain that has yet to see a single passenger through its terminal has deepened with revelations that 30 million euros has been spent on advertising it.

Ryanair says the £6 charge per passenger per one-way flight relates to costs associated with its booking system, and isn't a payments surcharge.

Ryanair has defied the government's move to ban surcharges on payments to airlines and other firms by saying it does not charge its passengers any credit or debit card fees.

Airlines, cinemas and holiday firms will be stopped from imposing millions of pounds in "hidden last-minute" charges on internet bookings. Treasury minister Mark Hoban said the government is prepared to legislate to prevent airlines and other businesses from imposing hefty charges on credit and debit card bookings that are difficult to detect.

However, the budget airline said in a statement: "Ryanair, the UK's favourite airline, today confirms that it does not impose any debit or credit card fees."

Ryanair claims instead to charge an "admin fee" per passenger per one-way flight. This £6 charge is levied when a passenger comes to pay and can only be avoided by using the airline's own prepaid Mastercard. It states on its website that this charge "relates to costs associated with Ryanair's booking system."

Read the rest of the article at the Guardian

MADRID—Spanish house prices fell at their fastest pace in two years in the third quarter, as the country's three-year property bust continues to take a toll on the euro zone's fourth-largest economy.

House prices decreased on average by 7.4% in the third quarter from the same period a year ago, with prices of used homes down a whopping 9.6% in the period, the country's statistics agency INE said Thursday.

This compares with a 6.8% fall in second-quarter house prices, and marks the third consecutive quarter of accelerated price drops after prices stabilized somewhat in late 2010. The reading also represents the third-biggest quarterly fall in house prices since the sector went bust in early 2008.

Read the full article at the Wall Street Journal

The U.K. is making plans to evacuate Britons living in Spain and Portugal in case the nations’ banking systems collapse, the Sunday Times reported, citing people in the Foreign Office it didn’t identify.

The U.K. is discussing sending planes, ships and buses to bring citizens back to Britain or giving them loans if they’re unable to access their money, the paper said. The Treasury may also put pressure on banks not to call in mortgage loans.

Officials continue to contingency plan for a range of possible scenarios, a spokesman for the Foreign Office, who declined to be named in line with government policy, said today.

Source: Bloomberg

Repossessed houses in Spain are worth 43 percent less on average than the valuations assigned on the mortgages for the properties, according to Fitch Ratings.

Price declines range from 20 percent to 58 percent, analysts Juan David Garcia and Carlos Masip in Madrid wrote in a report analyzing 8,235 properties funded by loans from banks including Banco Santander SA (SAN) and Bankia SA. The mortgages are in asset-backed securities with high loan-to-value ratios.

“Fitch does not expect lending to recover in 2012, as financial institutions are more focused on optimising their balance sheets, while their access to funding is limited,” the analyst wrote. “Lending is likely to remain concentrated on existing high-quality borrowers and on potential buyers of banks’ repossessed properties.”

Read the full article at Bloomberg