Banks’ bad loans hit record high in July

Bad loans held by Spain's banks mounted to a record high in July, the Bank of Spain said on Wednesday, a sign of persistent fragility in the bailed-out financial sector.

Banks' bad loans hit record high in July
The Bank of Spain building in Madrid. Photo: Kevin Poh

The proportion of loans at risk of not being repaid amounted to 11.97 percent of all credit in July, up from 11.63 percent the previous month, the central bank said in a report.

The pile of bad loans climbed to €178.7 billion ($238 billion) in July, up €2 billion from June, the Bank of Spain said.

Last year, the eurozone agreed to finance a rescue of Spain's banks, swamped in bad loans since a property bubble imploded in 2008 plunging the country into a double-dip recession.

Spain, the eurozone's fourth-largest economy, has so far withdrawn €41.3 billion from the eurozone rescue loan.

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