US

Here's Why The Crisis In Spain's Banks Might Not Spread To The Giants Santander And BBVA

Spain’s current banking crisis is unlikely to spread to Santander and BBVA because those banks are well diversified, according to Arturo de Frias of Evolution Securities.

In speaking to CNBC, de Frias revealed how the likely impact of this Spanish bank crisis will be positive.

  • 0:10 Spanish problem is serious and it will need to be fixed, but the big banks are solid
  • 0:44 Needed reforms will lead to even lower growth for a few years, but they have to be taken
  • 1:15 Diversification and lending policy protect BBVA and Santander, not as exposed to Spain’s real estate problem
  • 2:50 Cajas, or regional banks, are the financial arms of the country’s political parties; not 100% professional risk decisions being made by them
  • 4:00 €320 billion lent to Spain’s developers, €90 billion enough to back them up
  • 5:15 Private sector debt problem in Spain is largely due to the developers

Check out why Spain’s crisis starts at the banks and has a long way to go >

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