MADRID (AP) — The bad loan ratio of Spanish banks has hit a record 12.12 percent as people struggle to make repayments in a country mired in recession.
The Bank of Spain said Friday non-performing loans in August rose for the sixth straight month to 180.7 billion euros ($246.8 billion). In July, the bad loan ratio stood at 11.97 percent. Spain's bad loan ratio has soared from 1 percent in 2007, the year before the bloated real estate sector that had fuelled the economy collapsed.
Spain has been in recession for most of the past four years and has a 26.3 percent unemployment rate. The government says its reforms are beginning to produce results and predicts the recession will end this year, although unemployment is expected to stay extremely high for many years.