Spain’s cajas hold £84bn in bad assets

SPAINISH savings banks are holding around €100bn (£84.3bn) “potentially problematic” real estate assets, according to the country’s central bank.

The figure, which for the first time puts a material sum on the extent of the holdings by the unlisted regional banks, known as cajas, is as high as €217bn in total.

Governor of the Bank of Spain Miguel Ángel Fernández Ordóñez yesterday said the exposure did not endanger the country’s financial sector as a whole.

The Spanish government last week approved laws requiring unlisted regional banks to boost their capital reserves.

The law, which the cajas must show they have plans to conform to by September, will require listed banks to hold core capital levels of eight per cent and non-listed lenders to hold ten per cent.

Fernández Ordóñez added that the plan was “absolutely necessary.”

Spain’s central bank will publish an estimate of the financing needs for each caja next month.