Spain on Tuesday ordered banks to comply with a six-month extension of a state-backed loan scheme to June next year, designed to help companies struggling with the impact of the coronavirus pandemic, Reuters reported. Economy minister Nadia Calvino told a news conference bank clients who have no overdue payments can request these loans. Banks should also provide these loans with longer maturities and grace periods if customers ask for them, the minister said.
Wirecard's insolvency administrator Michael Jaffe on Monday said the payment system provider's technology platform had been sold to Spain's Banco Santander, Reuters reported. “Banco Santander will acquire the technology platform of the payment service provider in Europe as well as all highly specialized technological assets,” Jaffe said in a statement. In a separate statement, Banco Santander said it had agreed to acquire several highly specialised technological assets from the merchant payments business of Wirecard in Europe, to accelerate its growth plans in Europe.
The Spanish government is considering extending its scheme of state-backed credit lines beyond December while also preparing measures to support the battered hospitality sector during the coronavirus pandemic, sources with knowledge of the matter said, Reuters reported. “Everything is under discussion right now, the increase of the grace period, the extension of those credits and of the entire scheme beyond December, but nothing has been closed yet,” one source said.
Services companies in Italy and Spain suffered a fresh fall in activity last month as restrictions to contain the second wave of the coronavirus pandemic hit businesses, according to a widely watched business survey, the Financial Times reported. The IHS Markit flash services purchasing managers’ index dropped in both countries, with companies reporting sharp declines in demand and activity as a result of the pandemic, data released on Wednesday showed. The Spanish index was slightly better than most economists expected but still fell 1 point to a five-month low of 41.4 in October.
Banco Sabadell’s third-quarter net profit fell 77% from a year ago due to higher provisions, and the Spanish lender on Friday announced an efficiency plan, entailing yet unspecified job cuts in Spain, to counter the impact of the coronavirus pandemic, Reuters reported. Overall loan loss provisions in the July-September period rose to 302 million euros ($357 million) from 194 million euros a year ago. Still, Spain’s fifth-largest lender beat market expectations thanks to a recovery in its banking activity, both in new mortgage and consumer lending.
Spain is seeking to use its share of the EU’s €750bn coronavirus recovery fund to revitalise its stalled economy, with the government likening it to the country’s 1986 entry into the bloc or the creation of the European single market, the Financial Times reported. Madrid plans to borrow €27bn against future grants from the fund, long before they are formally approved by the EU. Prime minister Pedro Sánchez’s minority administration hopes to use the money to push through a 2021 budget and consolidate power, while boosting an economy hit hard by the coronavirus crisis.
Spanish companies already endured one of Europe’s toughest lockdowns earlier this year as the country became one of the region’s epicentres for the virus, Reuters reported. A fresh surge in infections is compounding the hit to the economy, which is expected to shrink by more than 11% in the year as a whole. Yet fiscal aid to prop up the economy only amounted to 3.7% of GDP against 8.3% in Germany, the Brussels-based think-tank Bruegel estimates. That left small Spanish companies rushing to take up short-term loans as their only lifeline.
The economic impact of the coronavirus resurgence in parts of Europe was laid bare on Monday by data which showed that fresh restrictions to control the spread of the virus had begun to choke off the recovery in the hardest hit country, Spain, the Financial Times reported. The decline in Spanish business sentiment data increases the chances that the eurozone economy will suffer a fresh downturn in the final months of this year, after rebounding from a historic recession caused by the onset of the pandemic in the first half of 2020, economists warned.
Caixabank has agreed to buy Bankia for 4.3 billion euros ($5.1 billion) in an all-share deal that creates Spain’s biggest domestic lender and signals a pick up in mergers among Europe’s banks as they battle the fallout from the COVID-19 pandemic, Reuters reported. The merger will create the largest domestic bank by assets with a combined market value of more than 16 billion euros ($19 billion), in a deal underpinned by annual cost savings of 770 million euros, the companies said on Friday.
Spain’s economy will struggle to recover from the impact of the coronavirus pandemic to such an extent that it will still be as much as 6 per cent smaller at the end of 2022 than it was before the crisis hit, according to the Bank of Spain, the Financial Times reported. In a grim set of economic projections released on Wednesday, the central bank highlighted the destructive impact of both the initial coronavirus outbreak and of the resurgence in infection rates following the end of the country’s lockdown in June.