Finance
Bank of Spain warns of slowing lending income growth
Published by Global Banking & Finance Review®
Posted on May 27, 2025
1 min readLast updated: January 23, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on May 27, 2025
1 min readLast updated: January 23, 2026
The Bank of Spain warns of slower lending income growth in 2025 due to lower interest rates and geopolitical risks, emphasizing the need to monitor credit quality.
MADRID (Reuters) -The Bank of Spain warned on Tuesday that lenders' income growth was likely to slow down this year amid lower interest rates and geopolitical risks, and it would need to closely monitor the credit quality of bank loans.
In its semiannual financial stability report, the central bank said the credit quality was now at favourable levels, but it could deteriorate if a potential economic slowdown weighs on borrowers.
The ratio of bad loans has been stable in Spain a little above 3% in late 2024 and early 2025, far below the all time-high of 13.6% in December 2013.
Banks' net interest income has fallen 3.9% in the first quarter, the central bank said, after rising 22% in 2023 and 8.8% in 2024.
It also said the much-delayed implementation of the Basel III international capital rules remained a priority as it would prevent accumulation of global systemic risks. The rules should be consistent with the planned revision of the European Union's supervisory framework, it said, to make the framework simpler without undermining the banks' resilience.
(Reporting by Jesús Aguado, editing by Inti Landauro)
The Bank of Spain warned that lenders' income growth is likely to slow down this year due to lower interest rates and geopolitical risks.
The credit quality in Spain is at favorable levels, but it could deteriorate if an economic slowdown affects borrowers.
The ratio of bad loans in Spain is stable at just above 3%, significantly lower than the peak of 13.6% in December 2013.
Banks' net interest income fell by 3.9% in the first quarter, following a rise of 22% in 2023 and 8.8% in 2024.
The implementation of Basel III rules is a priority as it aims to prevent the accumulation of global systemic risks.
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