In Spain, companies in the service sector concentrate almost 75% of loans to productive activities, exceeding 413,860 million euros as of June 2021, according to the report “Evolution of credit to companies in Spain 2021”, prepared on the basis of data from the Bank of Spain by the consulting firm AIS Group.
During the first half of last year, loans in this sector fell 245 million euros (-0.1%), although the annual variation rate rose from 8% in June 2020, the date on which the portfolio marked its peak of the year with a stock over 420,000 million, down -1.6% at the end of the first half of 2021, the first negative indicator since the pandemic broke out.
The delinquency rate among service companies remains at 4.7%, a record identical to that of December 2020, and the balance of non-performing loans is close to 19,525 million euros, barely 37 million below the figure for the closing of the previous year, although it represents 69% of the total doubtful credits of those destined to productive activities.
Trade reduces your debt
The companies in the commerce subsector are, together with those of real estate activities, the only ones that have reduced the volume of outstanding loans in the first half of 2021. Both group more than 40% of the total loans to service companies and drag the overall result of the sector.
In the first months of 2021, the stock Trade credit fell by almost 1,000 million, the steepest drop after that experienced by industrial companies, standing today at 85,860 million euros. The balance of bad credits, 5% in this period, placing itself below 5,700 million; with a delinquency rate, which went from 6.9% in December 2010 to 6.6% in June 2021.
The hospitality industry escalates its delinquency
In the first half of 2021, total credit to hospitality companies increased 9.5 million euros, a hardly relevant figure, although it was the portfolio that grew the most in the period from June 2020 to June 2021. It did so by almost 1,400 million euros, 4.1%. The hospitality sector is the only portfolio, along with transport, which still shows positive year-on-year rates of change in mid-2021.
The latest data from stock of loans granted to the hotel and catering industry put it at 35,500 million euros. Of these, 2,771 are classified as doubtful, compared to 1,900 in December 2020, which represents an increase of 46%, the highest percentage by far. This growth can be seen in the delinquency rate, which has risen from 5.3% in June 2020 or 5.4% in December 2020 to 7.8% in June 2021.
Artificial intelligence to keep credit and delinquencies under control
One of the great concerns of banks and finance companies is to control credit risk so that delinquencies do not skyrocket and, with it, the necessary provisions, and they do so by applying technology to improve the management of both the granting of loans and monitoring. and recovery.
According to the director of institutional relations at AIS, the economist Jose Manuel Aguirre, “Among the projects we carry out in AIS, the use of techniques such as machine learning to develop loan application evaluation models is increasingly common, whether for operations with individuals, freelancers or companies”. It is also frequent its use in monitoring systems, such as the generation of early warnings that warn of signs of a possible deterioration of the portfolio, and even in tools for the recovery of bad debts, to define the most appropriate recovery strategies for each profile and moment.
The reason is its great predictive power -compared with traditional methods- and its ability to optimize decisions. Machine learning methodology, for example, allows thousands of variables to be considered in the analyzes, so the level of accuracy of the predictive models that use them is much higher, which is a highly valued feature in the financial business and more so in the current context.
“Let’s keep in mind”, says the economist, “Despite what the current statistics reveal, it is expected that there will be a strong rise in arrears in the coming months and this may upset the current scenario. Improving control systems to detect signs of impairment before they become real defaults is essential for banks and finance companies ”.