Spain’s bad bank loans have hit a record high in 50 years as the European country struggles with an ailing economy due to the eurozone deteriorating debt crisis.
Statistics from Bank of Spain indicated on Tuesday that the value of bad debts held by the country’s banks climbed to its record high of 9.8 percent in July to reach 169.3 billion euros.
Data showed that one in ten loans deemed to be at risk up from 9.42 percent a month earlier.
Doubts about the extent of Spain's non- performing loans problem is hurting bank stocks and driving up the government's borrowing costs on investor concerns that the expense of propping up ailing lenders may add to the debt burden.
Spain has announced spending cuts of more than 11 billion dollars as well as tax increases to reduce the country's deficit to avoid seeking a financial bailout like Greece, Ireland and Portugal.
Battered by the global financial downturn, the Spanish economy collapsed into recession in the second half of 2008, destroying millions of jobs. Analysts say Spain's economy is expected to enter into a new recession in the first two quarters of 2012.
Europe plunged into deep financial crisis in 2008, which has continued to intensify in recent months.