Household Debt Fell by 3.6% in 2012

February 5th, 2013

According to data released by the Bank of Spain, household debt fell by 3.6% in 2012, reaching 835,342 million euros, compared with the 870,960 million euros recorded at the end of 2011, bringing household debt back to 2007 pre-crisis levels.

Family debt fell by 7,387 million euros in December over the previous month, as a result of the transfer of real estate assets and household loans to the so-called ‘bad bank’ (Sareb), said sources from the Bank.

Household debt was particularly affected year-on-year by the decline in consumer credit over the past year, which fell by 4%, to stand at 190,310 million euros.

Similarly, mortgage debt dropped by 3.5% year-on-year, and stood at 642,043 million euros, representing 76.8% of the total household debt.

El Economista reported that this ratio has been maintained for several years, since the fall in housing investment has paralleled that of the total debt, so that the amount that families spend on their homes occupies the majority of their savings.

Corporate Debt Fell More Than 5%

Corporate debt fell by 5.2% in 2012 year-on-year and totalled 1.155 billion euros, its lowest level since June 2007, while in relation to November it registered a drop of 3.4%, also due to the transfer of some real estate assets and company loans to the Sareb.

The year-on-year decline in this balance is explained by lower lending by resident credit institutions and off-balance securitized loans, which fell by 8%, to 736,192 million euros.

In contrast, debt securities grew by 12.5% year-on-year in 2012, to 73,100 million euros, while foreign lending fell by 1.6% compared to 2011, to 346,059 million euros.

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