Gavekal Capital: Spain's Doubtful Debtors

Monday, November 18, 2013

Spain's Doubtful Debtors

After a brief decline late last year and into 2013, non-performing loans at Spanish banks increased again in September and now account for 12.7% of lending (up from 12.1% in August and 10.1.% a year ago):

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Financial companies have been the worst performers in MSCI Spain over the last year:

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Much of the underperformance, however, can be attributed to Bankia (which was nationalized in May 2012):

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Can this year's positive relative performance last, or will the banks' doubtful debtors drag them down?

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