Spanish banks' bad loans increased to 8.95 percent of total lending in May, the Bank of Spain reported Wednesday. The bad-loan ratio rose from 8.7 percent in April.
Bad loans rose to EUR 155.84 billion in May, the highest since April 1994.
The property market crash as well as Spain's record high unemployment rate in the euro area raised banks' bad loans.
With the recession now expected to last throughout 2012 and 2013, the bad bank loan ratio is likely to remain on an upward trajectory, and could breach 10 percent by the second half of 2013, IHS Global Insight economist Raj Badiani said in a note.
Eurozone finance ministers are likely to meet on July 20 to finalize the EUR 100 billion Spanish bank bailout deal struck last month.
by RTT Staff Writer
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