Spanish bankers greeted 2017 with a sigh of relief. The general election in June 2016 ended the country’s year-long political deadlock, during which it was effectively without a government. The victory of the centre-right Popular party restored stability on the political front.
Last year also saw a material improvement in the asset quality of Spanish banks, largely on the back of 3.2% gross domestic product (GDP) growth, which made Spain one of the eurozone’s fastest growing economies. The country's property meltdown of 2008, which set off a near-decade-long recession, enjoyed a dramatic turnaround in 2016, with a 4.7% increase in house prices, the strongest performance in nearly a decade.