24 April 2019

Spanish bank crisis spells opportunity for Chinese lenders

The bad loan ratio of Spanish lenders soared to a record 12.1 percent in August, according to the Bank of Spain, the country’s central bank.

The ratio’s ascent had slowed in recent months but it continued its upward march as households and small companies struggled with their loan repayments.

As scary as the numbers look, the economic woes have opened windows of opportunity. They forced many Spanish companies to look for business elsewhere, particularly China, which has in turn presented possibilities for the mainland’s top lenders.

Industrial & Commercial Bank of China (01398.HK), for instance, has been expanding its operations in Spain as trade and investment between the two countries has flowed.

At the same time, weak asset prices in Spain may attract bargain-hunting investors from China prepared to wait for Spain’s recovery, activity that could also become a big source of wealth management income for Chinese banks.

– Contact the writer at [email protected]



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