Spanish Banks Slide After ECJ Ruling Leaves Them Facing Hefty Payout

Bank stocks in Spain dropped Wednesday, as lenders faced the prospect of repaying billions of euros to borrowers after losing a European court case. The European Court of Justice decided that borrowers should be eligible for full reimbursements of excess interest payments on variable-rate mortgages. Among the shares falling in Madrid, Banco Popular Espanol SA slid 6.8%, CaixaBank SA gave up 2.1%, BBVA SA shed 1.8% and Banco Santander SA declined 1.4%. Spain's High Court in 2013 decided to ban "floor clauses" on the basis that banks did not explain to borrowers what the financial and legal consequences of accepting them could be. That Spanish court did not require banks to repay the excess charges made before its ruling in 2013.