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Spain's bank bad loans hit record high

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Spain's bank bad loans hit record high

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The number of so-called bad loans – that is those that are unlikely to ever be repaid – held by Spanish banks rose to a record high in June.

The loans that fell into arrears increased by 8.4 euros. The total is now close to 164.4 billion euros.

The problem has been steadily increasing since a decade-long property boom ended four years ago.

The situation is set to worsen as many banks have refinanced debt owed by struggling companies to prevent them going bust.

In the same month that Spain sought a European bailout of up to 100 billion euros for its struggling lenders, their non-performing loans rose to 9.42 percent of their portfolios, central bank data showed. It had been 8.95 percent in May

Europe-wide, bad loans held by banks have doubled since the start of the financial crisis in 2008, leaving 1 trillion euros as non-performing, according to a study by PriceWaterhouseCoopers published on Wednesday.

Bad loan rates rose most in Greece, Italy, and Spain, it showed.