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Caja de Ahorros del Mediterraneo (CAM), a Spanish savings bank seized by the Bank of Spain, said more than half of its loans for property development were in default. Of 12.7 billion euros ($17.2 billion) lent to developers, 6.4 billion euros were classed as doubtful, the lender said in explanatory notes to its first-half earnings published late yesterday. Another 1.3 billion euros of those loans were classed as “substandard,” the lender said. The Bank of Spain is looking for a buyer for CAM, which was seized in July. It posted a 1.14 billion-euro first-half loss as its default ratio more than doubled to 19 percent since December. Selling the stricken lender is a priority for the regulator as it seeks to bolster confidence in a banking industry pummeled by defaulted loans to developers. Auditors KPMG said yesterday that the bank’s viability depends on the success of a plan put together by the government’s rescue fund. The Alicante-based lender said 5.4 percent of its 1.1 billion euros of mortgage loans to individuals were in default. Property development and business-services loans accounted for 29 percent of its loan book, the lender said.
