Spain’s devastating floods cost financial sector over $20B

MADRID

Spain’s devastating floods, especially in the Valencia province, cost the country’s financial sector over $20 billion, according to the Bank of Spain.

The eastern and southern regions of Spain were hit by floods on Oct. 29 and the damage caused to the financial sector is estimated to be around €20.5 billion ($21.6 billion), while some 561,210 people were directly affected by the floods.

Bank of Spain Governor Jose Luis Escriva said the total cost of the disaster to the financial sector is equivalent to 1.8% of the total loan volume of Spanish banks, noting that the bank has no concerns for the Spanish financial sector.

Escriva said that, of the $21.6 billion, $14.2 billion was for homes and $7.4 billion was for businesses. The process of recovering banknotes soaked or damaged by the floods continues, while the first deposit of some 22,700 banknotes is worth $760,100.

He mentioned that 9% of ATMs in the flood zones were out of service and 37 of 298 damaged banks were still closed, though the use of credit cards is slowly returning to normal after the cash withdrawal chaos at the beginning of the floods.

The Bank noted that the floods are likely to result in a 0.2 percentage point decline in Spain’s gross domestic product (GDP) in the fourth quarter.

The autonomous Valencian Community’s government requested $33.1 billion in aid for damages in its region alone, while the Spanish central government has decided to provide a total of $14.7 billion in two packages so far.

The death toll from the floods reached 226 since Oct. 29, while 13 people are still missing.

*Writing by Emir Yildirim