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Madrid - Spanish banks, alarmed by multiple bankruptcies and mass unemployment, are keeping a tight rein on loans and potentially choking off the lifeblood of a longed-for economic recovery, analysts say.
Insufficient credit threatens to throttle Spain's fragile recovery, they warn, after a double-dip recession triggered by a 2008 property crash, which left banks awash with bad loans.
Spain last year shored up its tottering banks' balance sheets with a €41.3bn programme financed by its eurozone partners.
Recession
But the banks have shown reluctance to lend, economists and industry say, as the eurozone's fourth-largest economy struggles with a 26% unemployment rate and, according to official data compiled by auditors PwC, a 20% rise in bankruptcy filings in 2013.
"The Spanish financial sector has considerably improved its solvability but it is still not playing its crucial role of supporting the economy because the flow of credit to families and businesses has not recovered," said a study released by the Esade business school.
"There has been a lack of credit since mid-2009, the rate of credit extended has diminished, not only for families but also and above all for companies," said the study's author, Josep Manel Comajuncosa.
According to the Bank of Spain, credit in the year to November fell by 4.0% to households and 8.3% to business despite the economy emerging from recession by posting 0.1% growth in the third quarter.
Recovery
Spain has been praised for pursuing ambitious reforms of the banks and for its economic reforms, including deficit-cutting austerity measures that sparked mass protests.
Economy Minister Luis de Guindos forecast this week that economic growth would tick higher, to 0.3% in the final quarter of 2013.
But, increasingly, people are warning about the threat of tight credit.
Bank lending to other private sector businesses dropped by 6.75% year-on-year in September 2013, "one of the most rapid contractions among major advanced economies", an IMF report said recently, urging "sustained efforts" to enhance banks' ability to lend and support a nascent recovery.
Corporate sector
Angel Gurria, secretary general of the Organisation for Economic Cooperation and Development, likewise cautioned that access to bank credit was "excessively restrictive", with credit to small and medium-sized businesses sliding by 17% between 2011 and 2012.
The European Commission, too, said that loans to the corporate sector were declining substantially even if some bottoming-out "might be in sight".
Banks, however, say Spain's economic situation remains fragile.
"When the economy has no growth or very moderate growth, credit cannot grow," said a spokesperson for the Spanish Banking Association.
"There is a problem with the quantity and quality of demand: on the one hand the demand for credit in the private sector is still very weak and, on the other, the solvency of businesses and families has deteriorated compared to before the crisis."
Insufficient credit threatens to throttle Spain's fragile recovery, they warn, after a double-dip recession triggered by a 2008 property crash, which left banks awash with bad loans.
Spain last year shored up its tottering banks' balance sheets with a €41.3bn programme financed by its eurozone partners.
Recession
But the banks have shown reluctance to lend, economists and industry say, as the eurozone's fourth-largest economy struggles with a 26% unemployment rate and, according to official data compiled by auditors PwC, a 20% rise in bankruptcy filings in 2013.
"The Spanish financial sector has considerably improved its solvability but it is still not playing its crucial role of supporting the economy because the flow of credit to families and businesses has not recovered," said a study released by the Esade business school.
"There has been a lack of credit since mid-2009, the rate of credit extended has diminished, not only for families but also and above all for companies," said the study's author, Josep Manel Comajuncosa.
According to the Bank of Spain, credit in the year to November fell by 4.0% to households and 8.3% to business despite the economy emerging from recession by posting 0.1% growth in the third quarter.
Recovery
Spain has been praised for pursuing ambitious reforms of the banks and for its economic reforms, including deficit-cutting austerity measures that sparked mass protests.
Economy Minister Luis de Guindos forecast this week that economic growth would tick higher, to 0.3% in the final quarter of 2013.
But, increasingly, people are warning about the threat of tight credit.
Bank lending to other private sector businesses dropped by 6.75% year-on-year in September 2013, "one of the most rapid contractions among major advanced economies", an IMF report said recently, urging "sustained efforts" to enhance banks' ability to lend and support a nascent recovery.
Corporate sector
Angel Gurria, secretary general of the Organisation for Economic Cooperation and Development, likewise cautioned that access to bank credit was "excessively restrictive", with credit to small and medium-sized businesses sliding by 17% between 2011 and 2012.
The European Commission, too, said that loans to the corporate sector were declining substantially even if some bottoming-out "might be in sight".
Banks, however, say Spain's economic situation remains fragile.
"When the economy has no growth or very moderate growth, credit cannot grow," said a spokesperson for the Spanish Banking Association.
"There is a problem with the quantity and quality of demand: on the one hand the demand for credit in the private sector is still very weak and, on the other, the solvency of businesses and families has deteriorated compared to before the crisis."
