Spanish banks struggle with bad loans

Banks in Spain are struggling to control their growing bad loan books, it has been claimed.

Bad loans as a proportion of total lending in the country's banking sector zoomed up to 6.1 per cent in January, the highest level since 1995.

In January the total number of bad loans climbed to €110.7 billion, up from €107.2 billion in December.

The rising number of bad loans could lead to an increase in the number of distressed properties available to Spanish home buyers.

Indeed, many banks are placing the blame on the increased level of lending on the recent housing market crash.

However, despite the recent turmoil in Spain, which has seen home values fall by as much as 40 per cent in some regions, investors have been told that there are still opportunities to make a profit.

Ray Withers, the founding director of Property Frontiers, noted that markets recovering from the recent global crisis are likely to recovering markets are likely to offer investors the best growth opportunities.

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