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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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Fri, 01/31/2014 - 12:34 | Link to Comment LawsofPhysics
LawsofPhysics's picture

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

I'm confused.

Fri, 01/31/2014 - 12:44 | Link to Comment idea_hamster
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.

Fri, 01/31/2014 - 12:47 | Link to Comment nope-1004
nope-1004's picture

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


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


Fri, 01/31/2014 - 13:04 | Link to Comment max2205
max2205's picture

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

Tastes like chicken

Fri, 01/31/2014 - 13:08 | Link to Comment SAT 800
SAT 800's picture

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

Fri, 01/31/2014 - 12:53 | Link to Comment Carpenter1
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.

Fri, 01/31/2014 - 13:40 | Link to Comment Rafferty
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.

Fri, 01/31/2014 - 13:17 | Link to Comment National Blessing
National Blessing's picture

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

Fri, 01/31/2014 - 12:35 | Link to Comment kliguy38
kliguy38's picture

Moar Taper please

Fri, 01/31/2014 - 13:13 | Link to Comment HardlyZero
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 !

Fri, 01/31/2014 - 12:37 | Link to Comment NoDebt
NoDebt's picture

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

Fri, 01/31/2014 - 12:40 | Link to Comment CreativeGlobalF...
CreativeGlobalFinance's picture

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

Fri, 01/31/2014 - 12:43 | Link to Comment DblAjent
DblAjent's picture

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

Fri, 01/31/2014 - 12:47 | Link to Comment QQQBall
QQQBall's picture

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

Fri, 01/31/2014 - 13:56 | Link to Comment johnconnor
johnconnor's picture

that's Twitter chart no?

Fri, 01/31/2014 - 12:35 | Link to Comment maskone909
maskone909's picture

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

Fri, 01/31/2014 - 12:40 | Link to Comment LawsofPhysics
LawsofPhysics's picture

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

Fri, 01/31/2014 - 12:45 | Link to Comment maskone909
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

Fri, 01/31/2014 - 12:37 | Link to Comment Bunga Bunga
Bunga Bunga's picture

Don't worry, they have the Spanish MyRA.

Fri, 01/31/2014 - 12:41 | Link to Comment Ban KKiller
Ban KKiller's picture

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

Fri, 01/31/2014 - 12:42 | Link to Comment rlouis
rlouis's picture

Fractional reserve banking - nothing but illusions.

Fri, 01/31/2014 - 12:41 | Link to Comment tocointhephrase
tocointhephrase's picture


Fri, 01/31/2014 - 12:45 | Link to Comment _ConanTheLibert...
_ConanTheLibertarian_'s picture

Nice parabolic chart!

Fri, 01/31/2014 - 13:18 | Link to Comment Wile-E-Coyote
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.


Fri, 01/31/2014 - 12:48 | Link to Comment ParkAveFlasher
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.

Fri, 01/31/2014 - 12:49 | Link to Comment maskone909
maskone909's picture

i take it you havent seen a german scheizer film.

Fri, 01/31/2014 - 13:03 | Link to Comment SAT 800
SAT 800's picture

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

Fri, 01/31/2014 - 13:09 | Link to Comment papaswamp
papaswamp's picture

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

Fri, 01/31/2014 - 13:14 | Link to Comment SAT 800
SAT 800's picture

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

Fri, 01/31/2014 - 13:18 | Link to Comment Confabulator
Confabulator's picture

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

Fri, 01/31/2014 - 15:30 | Link to Comment hoist the bs flag
hoist the bs flag's picture

nice expon...aww, never mind

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