MADRID — Spain’s banks, their margins slashed during the pandemic, are betting on a high-yield route back to profitability through consumer loans — by encouraging lockdown-weary customers to spend big on cars, holidays, and home improvements.
Consumer lending on average makes up just 7% of those banks’ loan books, though yields on that business are generally several times higher than on mortgages.
It plummeted as COVID-19 peaked and, with the risk of defaults on loans taken out before the pandemic not yet eliminated, some in the industry caution that it may be too early to push millions of Spaniards into taking on more debt.
But, as they struggle to earn money elsewhere …
Keep on reading: Spain’s banks lay groundwork for post-COVID consumer spending boom