Spanish Business News

Santander profit falls on Spanish property provisions

Tue, 31 Jan 2012 13:51:14 GMT

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

Unemployment to reach 27% in Spain?

Sun, 29 Jan 2012 20:42:52 GMT

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?

Spanish central bank warns of double dip recession

Mon, 23 Jan 2012 13:59:48 GMT

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

The Bank of Spain said the country, which only emerged from an 18-month recession at the start of 2010 and grew 0.7pc last year, was suffering from an escalation in Europe's debt woes.

"In 2011 the modest recovery which the Spanish economy began a year earlier weakened as the eurozone sovereign debt crisis extended to a greater number of countries and financial market tensions strengthened," it said in a report.

Read the full article at the Telegraph

The Spanish bank run has started

Sat, 21 Jan 2012 17:07:02 GMT

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the Telegraph, in the 11 months to November 2011, "€48bn, equal to just under 3pc of total Spanish bank deposits" was withdrawn from Spanish banks and cajas.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?

Spain May Need Back-Door Bailout for Regions

Wed, 11 Jan 2012 14:05:55 GMT

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

Spain's white elephant airport spends 30 million euros on advertising

Tue, 10 Jan 2012 13:37:42 GMT

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.

Castellon airport in Spain's Valencia region was inaugurated in March last year after an estimated 150 million euros (£130m) was spent on its development.

But not a single aircraft has landed on its runways after the airport failed to secure a license and was unable to attract airlines to add the destination in their routes.

The airport has become a symbol of reckless public spending on ill-thought out projects across Spain that has left the country crippled with debt. A recent report showed that only 11 of Spain's 48 airports were profitable.

Now, Just days after the debt-laden autonomous region was forced to seek assistance from the central government to stall a default on a loan of 123 million euros, details of the accounts of the Spain's newest airport have been made public.

It emerged that 30 million euros was spent on publicity for Castellon's airport as it was promoted at tourism fairs, according to a report in Spain's daily El Pais newspaper.

Read the full article at the Telegraph