Spanish banks to seek 30 billion euros in ECB loans

Cordon Press

THIRTY billion euros in loans from the European Central Bank’s programme to spur lending to businesses and households, will be borrowed by Spanish Banks according to Economy Minister Luis De Guindos in an interview published yesterday.

De Guindos said “These loans will allow businesses and individuals to get credit on very competitive terms.”

The ECB plan is to try and convince banks to lend more to revive the economic growth in Europe. A lot of banks have stopped lending as much as they try to fortify their capital.

De Guindos stated that “the latest data we see in the industrial sector has lost a bit of momentum while the services sector is in a rapidly expanding phase.”

The economy is forecast to grow 1.5 per cent this year, making it one of the fastest growing economies in mainland Western Europe.

The new bank funding plan is set to start on September 18 and a second scheduled  for December with the objective of financial assistance towards the flow of credit to businesses in the Eurozone to encourage growth.

The Spanish goverment is likely to sell more shares in state owned Bankia , claims De Guindos, in mid-October. The ECB is due to announce the results of a Europe-wide health check of banks on October 17.

He claims “they’ve still not decided what percentage, but the share price is already above the price of the last pricing.”

Faith is slowly being restored in Spain’s banking system after the FROB, a goverment body which handles Spain’s bank holdings, sold a 7.5 per cent stake of Bankia in Febuary.

Bankia’s shares closed on Friday at €1.53 per share, in contrast to the €1.51 per share price of the sale in February.

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