Spain's Banco Popular Bad Loans Surge 20% QoQ (Most Ever) To Record High

Tyler Durden's picture

As we draw ever closer to Europe's date with disaster and the inevitable lifting of the kimono that Draghi's supervision-driven stress tests appear to be, European banks are being forced to finally 'fess up to the real state of their balance sheets. Confused at how bad macro data can be in Spain and yet banks have been 'surviving' or 'thriving' - simply put, they lied (and are now being forced to un-lie) 

Spain's Banco Popular just released earnings showing a 19.6% rise in non-performing loans at EUR21.2 billion driven by a surge in "doubtful loans for subjective reasons" that almost tripled QoQ. This is the highest bad loan ratio on record at 14.27% - but have no fear, their CEO says "loan defaults are nearing their peak," because he would know...


From the Banco Popular earnings report...


and in context!!


It seems we have reached the point where some "honesty" is the best policy as if they want to raise capital and be "saved" by the ECB, they need to show just how bad it all is - together. Expect more of the same from Spanish (and Italian) banks...


The European bank ETF EUFN is down over 7% from its Jan highs in the last few days and while somewhat illiquid remains the cleanest way for US retail to trade any follow-through from European banking system exuberance fading.


Charts: Bloomberg

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LawsofPhysics's picture

So, the E.Z. is not "fixed" then?

I'm confused.

idea_hamster's picture

Think of what that chart would look like if Spain did NOT treat home mortgages the way the US treats student loans.

nope-1004's picture

Insolvent.  Broke.  Broken.  Dysfunctional.  Criminal.  Desperate.  Unrealistic.  Delusional.  Bankers.


Nothing a new stress test can't fix.  lol.


max2205's picture

That's a bubble chart...looks like twtr

Tastes like chicken

SAT 800's picture

"Banco Popular"---a little giggle built into the name there; getting less popular all the time, now.

Carpenter1's picture

"Fixing" a structural problem with fiat only leads to devaluation of the fiat, which leads to the necessity of more fiat, and the black hole gets bigger and blacker until the fiat is devalued beyond hope and it becomes obvious to everyone that hyperinflation has set in, obvious that is to everyone except CB's, economists, and politicians.

Rafferty's picture

I wonder is this correct.  Can they not 'just' print enough to monetize the outstanding debt?  When that's done they can move on to pastures new, with perhaps just a quick glance backwards at the devastation they caused.

National Blessing's picture

We've been listening about the pigs for years now.  Nothing seems to change.  It's all a bullshit story.

kliguy38's picture

Moar Taper please

HardlyZero's picture

After the recent minor taper is done with the balsawood EMs...the follow through major taper will start cutting ancient timber.   Will India, Japan join and the PJIIIGS up ?    Every weekend, I'm Yellin' ya !

NoDebt's picture

I could jump an ATV off the end of that chart!

CreativeGlobalFinance's picture

Don't sell yourself short. Wait another quarter or two for max distance!

DblAjent's picture

Finally! A "high" that's actually almost accurate!

QQQBall's picture

I wouldn't wait. Another couple months and that ATV will rollover backwards. 

johnconnor's picture

that's Twitter chart no?

maskone909's picture

what is stoping these peripheral BRICS banks from extorting the ECB? 

LawsofPhysics's picture

My gut thinks that they might have their eyes on an even bigger private bank.

maskone909's picture

yeah as soon as i hit submit i realized there is a plethora of more probable scenarios

one being that the BRICS banks will be used to create defaults

it will make for a good excuse to confiscate soverign gold as collateral

Bunga Bunga's picture

Don't worry, they have the Spanish MyRA.

Ban KKiller's picture

Santander to the rescue! Buys all "bad" loans and off loads to GS muppets? 

rlouis's picture

Fractional reserve banking - nothing but illusions.

Wile-E-Coyote's picture

I just love it; the whole fucking thing is coming apart.

I'm starting up guillotine production.... rubberised blunt blades especially for bankers.


ParkAveFlasher's picture

There is nothing "subjective" about MATH.  You can call a plateful of dog turds delicious tapas, but you calling it that won't transform it into a delightful supper.

maskone909's picture

i take it you havent seen a german scheizer film.

SAT 800's picture

"Loan defaults are nearing their peak?---oh, well; that's alright then. Otherwise I might be worried about that bank.

papaswamp's picture

Buh...buh...but MSNBC and Business Insider told me they were fixed! Must be Bush's fault!

SAT 800's picture

They wanted the Euro; They got the Euro. They should have read the instruction book.

Confabulator's picture

I thought the word 'Accountancy' was derived from the word 'Accountability'... Where did it all go wrong?

hoist the bs flag's picture

nice expon...aww, never mind