Could a run-on Spain’s sixth largest lender turn into a stampede?
2017-06-12T07:07:44-04:00 June 12, 2017, 7:07 a.m. Duncan Richardson
Spain’s sixth largest bank, Banco Popular, appears to be losing the confidence of its customers. In 2016, the troubled bank lost 6.5% of its total deposit base as the banks solvency came into question. The bank responded by offering attractive deposit rates up to 4%, but the outflow only accelerated when the bank reported a 139-million-euro quarterly loss last week.
According to Spanish News Agency El Confidencial retail and institutional investors are withdrawing funds at such propositions the lender is on the verge of bankruptcy. The bank's share price fell 11% last week and is down another 5.72% this morning.
Unsurprisingly, the Spanish government has tried to reassure investors that the Spanish banking sector is solvent and the financial system will not be affected whatsoever by what is happening at Banco Popular.