Bank of Spain warns of risk of insolvency due to ICO loans – Economy

The Bank of Spain warns that companies in the sectors most affected by the crisis will face a risk of insolvency due to the end of the grace periods for loans guaranteed by the State through the Official Credit Institute (ICO), something that will happen during this year.

In an analytical article, published this Tuesday, the banking supervisor points out that there has been a rebound in credits under special surveillance, especially in the sectors most affected by the crisis, which “shows the existence of latent risks for business solvency in the medium term”.

These risks, he points out, “could materialize, especially if the economic recovery were less vigorous than expected as a result, for example, of a possible escalation of tensions linked to the war in Ukraine.”

During 2021 and the elapsed part of 2022, a progressive recovery in the number of active companies has been observed.

The data provided by the Bank of Spain shows that in 2020 the number of active companies fell moderately (1.1% less) to 3,366,570, a more moderate cut than that observed during the financial crisis, which represented a fall 1.5% on average in the period 2008-2013.

This reduction due to the covid crisis affected practically all sectors, except transport and storage and information and communications, in which there was an increase, and it was more pronounced in the hospitality industry and in commerce, where they lost 3 % and 2% of companies, respectively.