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Bank lending to Spanish corporations in terms of their size. An analysis based on the joint exploitation of information from the CCR and the CBI

Carmen Martinez Carrascal and Maristela Mulino Ríos

Economic Bulletin, 2014, issue JAN, 8 pages

Abstract: Bank lending is the main source of finance for Spanish non-financial corporations (especially smaller ones). Following their strong growth in the pre-crisis upturn, loans extended to this sector have shrunk markedly since mid-2009, against an unfavourable cyclical background marked by the need to correct excessive company indebtedness. The latest developments show the rate of decline has eased, from 9.7% in May 2013 to somewhat below 8.5% in November 2013. When assessing lending extended to non-financial corporations, it is important to analyse its breakdown by sector of activity and by company size. The breakdown by productive sector can be tracked using the information corporations periodically report to the Banco de España. Conversely, the analysis of bank lending on the basis of company size is hampered by the lack of specific statistics enabling loans and firm size to be linked, without major delays. Such analysis has taken on particular relevance in recent years, in a setting in which the crisis may be affecting the access of small and medium-sized enterprises (SMEs) to finance more markedly than is the case for large businesses. This trend may be inferred, for example, from the ECB’s regular survey on the access to finance of SMEs in the euro area. While current monetary statistics do not include a breakdown of lending based on firm size, two microeconomic databases are available at the Banco de España that enable an approximation to the behaviour of lending to SMEs: the Central Credit Register (CCR) and the Integrated Central Balance Sheet Data Office survey (CBI by its Spanish name), which combines the information from the Central Balance Sheet Data Office annual survey and from the mercantile registers. However, the CCR and the CBI both have limitations that hamper the regular monitoring of bank lending to Spanish SMEs. The CCR contains firmby-firm information on the outstanding balances of bank loans (from resident credit institutions), with a lag of a little more than one month, but size is not included among the characteristics of the companies. The CBI, by contrast, has variables that allow both the size of the firm and its outstanding loans to be known, but the data are available with a time lag of at least one year, and the sample of firms covered is inferior to that of the CCR, which has information on virtually all companies with loans outstanding with resident institutions. Under these conditions, the usual approach pursued to date in analyses conducted by the Banco de España has been to use the volume of loans (in particular, the outstanding balance of debt recorded in the CCR) as an indicator of company size. As from spring 2015, the introduction of changes at the CCR and the new M14 supervisory return will enable year-on-year growth rates of corporate loans to be obtained directly, distinguishing between firms on the basis of their size. In the meantime, this article presents a new methodology, combining information from the CCR and the CBI, for the separate monthly monitoring of bank loans extended by resident institutions to Spanish SMEs and to bigger corporations. The article is in three sections. The first describes the methodology proposed for the breakdown of lending on the basis of firm size. The second discusses the results obtained on applying this methodology, with information to November this year. Finally, the third section draws the main conclusions.

Date: 2014
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Handle: RePEc:bde:journl:y:2014:i:01:n:02