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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 | 4388243 LawsofPhysics
LawsofPhysics's picture

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

I'm confused.

Fri, 01/31/2014 - 12:44 | 4388282 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.

 

http://www.nytimes.com/2010/10/28/world/europe/28spain.html?pagewanted=all

Fri, 01/31/2014 - 12:47 | 4388291 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 | 4388356 max2205
max2205's picture

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

Tastes like chicken

Fri, 01/31/2014 - 13:08 | 4388376 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 | 4388314 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 | 4388490 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 | 4388408 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 | 4388251 kliguy38
kliguy38's picture

Moar Taper please

Fri, 01/31/2014 - 13:13 | 4388391 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 | 4388252 NoDebt
NoDebt's picture

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

Fri, 01/31/2014 - 12:40 | 4388268 CreativeGlobalF...
CreativeGlobalFinance's picture

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

Fri, 01/31/2014 - 12:43 | 4388281 DblAjent
DblAjent's picture

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

Fri, 01/31/2014 - 12:47 | 4388296 QQQBall
QQQBall's picture

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

Fri, 01/31/2014 - 13:56 | 4388533 johnconnor
johnconnor's picture

that's Twitter chart no?

Fri, 01/31/2014 - 12:35 | 4388254 maskone909
maskone909's picture

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

Fri, 01/31/2014 - 12:40 | 4388271 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 | 4388285 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 | 4388256 Bunga Bunga
Bunga Bunga's picture

Don't worry, they have the Spanish MyRA.

Fri, 01/31/2014 - 12:41 | 4388276 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 | 4388278 rlouis
rlouis's picture

Fractional reserve banking - nothing but illusions.

Fri, 01/31/2014 - 12:41 | 4388279 tocointhephrase
tocointhephrase's picture

SELL GOLD!

Fri, 01/31/2014 - 12:45 | 4388290 _ConanTheLibert...
_ConanTheLibertarian_'s picture

Nice parabolic chart!

Fri, 01/31/2014 - 13:18 | 4388412 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 | 4388292 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 | 4388303 maskone909
maskone909's picture

i take it you havent seen a german scheizer film.

Fri, 01/31/2014 - 13:03 | 4388358 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 | 4388373 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 | 4388404 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 | 4388418 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 | 4388891 hoist the bs flag
hoist the bs flag's picture

nice expon...aww, never mind

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