Furthermore, these institutions played a very important role in resolving the crisis, since they were able to take over other institutions in a weaker position. It is not surprising, therefore, that the international presence of Spanish banks has increased since the crisis, in contrast to that of the banks of most European countries, which have tended to reduce their international operations. Over the last decade, Spanish banks have increased their international exposure by 45%, while the banks of countries such as Germany, France and Italy have reduced theirs by 38%, 16% and 15%, respectively. 5/17  On the other hand, the effort to adjust business in Spain has been highly significant. Specifically, over the last 10 years, the total assets of business in Spain have been reduced by 20% and employment in the industry by 32%. Also, the number of institutions has fallen by 34%, with a decrease in the number of domestic banks1 from 122 at the beginning of the crisis to 61 in 2018. As a result, concentration has increased significantly. Most of the mergers and takeovers have given rise to healthier banks, with significant cost savings. 1  Grupos consolidados y entidades sin grupo, de propiedad nacional. 6/17  One effect of this consolidation process has been the disappearance of 43% of the bank branches existing in Spain.
However, there is notable unevenness across geographical areas, with specific areas of the main Spanish cities and of the Balearic and Canary Islands where housing prices are rising sharply. This rise in real estate activity is not resulting in an increase in the associated lending. Bank credit to real estate and construction firms continues to fall at rates above 10%, partly due to the sale of packages of non-performing loans. In addition, the stock of household mortgage loans is practically stagnant. It is true that the flow of new lending is fairly buoyant, but starting from a low level. Furthermore, household mortgage credit standards remain prudent. Specifically, practically all the loans granted are for an amount below the value of the real estate transaction, as compared with only 50% before the crisis. Mortgages represent, on average, less than four times the annual income of households, and the related debt service (repayments plus interest) accounts for less than 20% of that income in 50% of mortgages. Also, mortgages with long maturities, of over 30 years, represent less than 10% of the total. In any event, it should not be overlooked that, although the credit associated with this activity is not increasing and new household mortgages are being granted with prudence, a potential downward adjustment to housing prices would still have a negative impact (although logically a smaller one) on deposit-taking institutions through the effect on foreclosed asset valuations and the indirect impact on aggregate levels of consumption and activity.