Spanish firms bolster their financial solidity
Spain’s non-financial corporations face uncertainty and risks, but their solid financial position, together with favourable financing conditions and the boost provided by NGEU funds, should encourage greater investment.
In 2024, Spanish firms experienced lower income growth, although they managed to continue improving their net assets and financial situation. This was reflected in their lending capacity, a sustained deleveraging process and an increase in their financial assets. However, despite this favourable position, a buoyant Spanish economy and an improvement in financing conditions, business investment remained weak throughout the year.
In 2024, firms’ disposable income (equivalent to savings)1 declined for the second consecutive year, and it did so sharply, by 6.1%. This was the biggest setback since 2011, if we exclude the year of the pandemic. This deterioration occurred in an environment marked by declining earnings (gross operating surplus, GOS), which were down 2.4%, and an increase in net property income, of 11.0%. This latter rate is significant, but much lower than that of the previous year (37.6%), which was mainly driven by an increase in net dividend payments (6.9%). In the case of net interest payments, they grew by 16.5%, although the rate of increase eased as the year progressed, in line with the relaxation of monetary policy. In fact, in Q4 2024, interest payments, before financial brokerage services (SIFMI), fell by 3.0% year-on-year, in contrast to an increase of over 40% recorded in the first half of the year. On the other hand, tax payments practically stagnated (up just 0.2%). Thus, last year, corporate savings stood at just 204.9 billion euros, or 12.9% of GDP (see first chart).
- 1. Gross value added of companies, excluding wage earners’ remuneration, tax payments and the net income balance, which includes interest payments and dividends distributed.
Business investment recorded a growth of 3.6% compared to the prior year, which is lower than nominal GDP growth (6.2%). Therefore, investment in terms of GDP fell 0.3 pps to 12.7% and remains below pre-pandemic levels (13.9% on average in the period 2014-2019).2 Consequently, last year companies generated a lending capacity, specifically of 14.24 billion euros (0.9% of GDP). Although this has been commonplace since 2009, the figure is lower than that of 2023, which stood at 2.0% of GDP, or the average for the period 2014-2019, which was 3.2%.
This lending capacity generated by the business sector last year was used for the acquisition of financial assets, for which firms also took on greater levels of debt (in volume terms): at a time when interest rates began to fall, companies were able to borrow again. In this regard, the volume of consolidated debt (i.e. excluding debt between companies) increased in 2024 for the first time in three years, by 21.2 billion euros (1.2%), reaching a total of 1.01 trillion. In any event, given that nominal GDP grew more rapidly, last year saw a continuation of the corporate deleveraging process (see second chart), which is understood as the reduction in the debt-to-GDP ratio: this ratio fell by 2.5 points to 63.5%, marking its lowest level since 2001. This is also a far cry from the peak reached in 2009 (119.0%), as well as being below the level for the euro area as a whole (67.3%). If we measure the total unconsolidated debt, it was slightly over 1.32 trillion euros, representing 83.2% of GDP and also well below the euro area level (105.6%).
- 2. In real terms (using the capital goods investment deflator), growth < in 2024 was 2.3% and is well below the peak reached in 2019 (–11.7%). Investment by firms is showing greater weakness than would be expected in a context in which the cost of debt is falling, driven by lower interest rates, and in which their net asset position has improved; the obstacles to investment are therefore related to other factors, such as uncertainty, the outsourcing of production processes and business regulation. See Bank of Spain (2025), «Report on the financial situation of households and firms», 2nd half of 2024, and «Weak business investment in Spain following the pandemic: an analysis based on the Banco de España Business Activity Survey», Economic Bulletin 2025/Q1.
The increase in the debt balance (the aforementioned 21.2 billion euros) corresponds to net new borrowing of 17.3 billion euros (the rest of the change corresponds to changes in value and other changes in volume), mostly in the form of fixed-income securities (13.4 billion), while net borrowing in the form of loans was also positive but somewhat lower (3.9 billion). In any case, bank loans – contracted with monetary financial institutions (MFIs) – continue to lose prominence in the companies’ financing: whereas between 2014 and 2019 they represented almost half of the total consolidated debt on average, in 2024 that share stood at 44.5% (see fourth chart). On the other hand, loans granted by non-residents and, above all, the issuance of fixed-income securities have gained prominence.
In the case of companies’ financial assets, they increased sharply last year, by 174.7 billion euros (5.7%), to a total of 3.25 trillion (see fifth chart): this increase far exceeds that of 2023 (126.2 billion) as well as the 2014-2019 average (100.0 billion). This increase in assets is explained both by their increase in value (94.3 billion), especially in the case of shares and investment funds (IFs) thanks to the good performance of the main stock market indices, as well as by the net acquisition of assets (82.9 billion). This financial investment by companies was focused in trade receivables, cash and deposits, as well as shares and IFs, while they disinvested slightly in fixed-income securities.
As for the structure of companies’ financial wealth, it is still dominated by equity holdings in other companies and IFs, accounting for 54.7% of the total, which is slightly above the average for the period 2014-2019 (54.4%). Cash and deposits have also increased as a proportion of the total, while the proportion corresponding to loans and other assets, such as trade receivables, has decreased.
In short, non-financial corporations are facing the current context – marked by increasing uncertainty and risks surrounding the scenario – in a solid financial position. This strength, coupled with falling inflation, favourable financing conditions and the boost provided by NGEU funds, should help to drive stronger investment.
- 1. Gross value added of companies, excluding wage earners’ remuneration, tax payments and the net income balance, which includes interest payments and dividends distributed.
- 2. In real terms (using the capital goods investment deflator), growth < in 2024 was 2.3% and is well below the peak reached in 2019 (–11.7%). Investment by firms is showing greater weakness than would be expected in a context in which the cost of debt is falling, driven by lower interest rates, and in which their net asset position has improved; the obstacles to investment are therefore related to other factors, such as uncertainty, the outsourcing of production processes and business regulation. See Bank of Spain (2025), «Report on the financial situation of households and firms», 2nd half of 2024, and «Weak business investment in Spain following the pandemic: an analysis based on the Banco de España Business Activity Survey», Economic Bulletin 2025/Q1.
