Banks in the eurozone tightened lending standards to companies in the third quarter, according to the results of the latest European Central Bank (ECB) survey.
The reason for this is increased economic risks and growing geopolitical uncertainty, which continue to burden the business environment.
Nevertheless, the summer months saw a slight increase in the demand of companies for loans, although it still remains below the long-term average. The ECB states that lower interest rates and the need to refinance existing debts were the main reasons for this slight recovery in credit activity.
A similar trend was observed among citizens: lower borrowing costs fueled greater interest in housing loans, while demand for consumer loans remained largely stable.
Expectations for the end of the year
According to bank projections, companies’ demand for loans in the fourth quarter should remain unchanged, while citizens’ demand for housing loans could rise slightly again.
A similar trend is expected in consumer loans, although banks are warning of possible new tightening of conditions for their approval, reports Investor me.
Credit standards for companies should remain at the level of the summer, while conditions for home loans are expected to tighten slightly, the ECB survey shows.
Banks also predict that by the end of the year, consumer loans could become even more difficult to access, especially in countries with higher inflationary pressures.
