Spain’s ‘toxic’ banks increase property portfolio at alarming rate

SPANISH banks’ toxic property portfolios – born of reckless credit and ill investment –  continue to grow at an alarming rate.

In the first six months of this year, the 13 largest financial institutions in Spain held €90.2 billion worth of property assets, an increase of €6.1 billion since last year.

A toxic asset’s value has become so low that there is no longer a functioning market for it, so it cannot be sold on for a price satisfactory to the seller.

Land is currently the most toxic real estate asset.

Spanish banks had land assets of €35 billion pre 2014 and have added a further €1.5 billion over the last six months.

The amount from private properties surrendered by those who cannot afford their mortgages has risen to €1.4 billion this year.

La Caixa bank has the largest volume of properties in its portfolio, followed by Banco Popular, BBVA and Banco Sabadell.