The private sector has been deleveraging rapidly since
2010. For example, between December 2012 and June
2013, every part of Spain’s private sector reduced its debt,
as follows: households, €20 billion; financial institutions,
€116 billion; and non-financial companies, €64 billion.
Although public sector debt increased by €106 billion
over this period, the overall debt of the Spanish economy
fell by €94 billion (equivalent to 9 points of GDP) in just six
months.
The share of Spain’s total debt contributed by non-finan-
cial companies -which are responsible for private invest-
ment in Spain and, therefore, reflect our economy’s ability
to generate jobs- fell by five points in two and a half years,
from 35% to 30%. In 2010, the debt of these companies
peaked at €1.51 trillion. However, by the second quarter of
2013 it had fallen by €188 billion (around 18 points of GDP,
double the reduction for the Spanish economy).
Increasing funding from internal rather than
external resources
The picture is even more positive than expected if we
analyse changes to the balance sheet structure of these
companies. Since 2010, the main industrial and service
companies listed on the Spanish stock exchange have
reduced their debt and strengthened their balance
sheets.
Non-financial companies reduce their debt by
€190 billion in two and a half years.
At the end of the first half of 2013, 30.3% of the assets
of listed non-financial companies were financed from
equity, compared to 27.7% at year-end 2010. The debt
of Spanish companies has therefore fallen in both abso-
lute value and in relative terms.
Increased funding from the markets
This deleveraging of the companies analysed has been
accompanied by a change in the structure of their debt.
Whilst companies have traditionally turned en masse to
the banks for funding, listed companies are now going
to the market, which is becoming more important as a
source of finance.
5.16%
-5.13%
-6.99%
-2.76%
Net Equity (Capital, Reserves,
Retail investors and others)
Non-current Liabilities
(Financial and non- nancial)
Current Liabilities
(Financial and non- nancial)
Total Assets
Change in nancial structure of IBEX 35 industrial and service companies
(2010-2013)
(% change in equity between December 2010 and June 2013)
-85,000
Households
Financial
Firms
Non- nancial
Firms
-66,000
Substantial reduction in private sector indebtedness in
Spain between 2010 and 2Q 2013.
(Million euros)
-188,000
Ne
(
(
Change
(2010-2
(% chan
-85,000
Households
Financial
Firms
Non- nancial
Firms
-66,000
Substantial reduction in private sector indebtedness in
Spain between 2010 and 2Q 2013.
(Million euros)
-188,000
The Market Environment
Annual
Report 2013
BME
22
1...,12,13,14,15,16,17,18,19,20,21 23,24,25,26,27,28,29,30,31,32,...236