ECB Survey Says Lending Conditions For Businesses Eased In Q3

(RTTNews) - Lending conditions for businesses eased further in the third quarter, while those for house purchases tightened, results of a survey by the European Central Bank showed Tuesday.

Credit conditions on consumer credit and other lending to households also eased in the third quarter, the ECB's quarterly Bank Lending Survey revealed. Competition was the main driver of banks' easing of credit standards for loans to enterprises, the survey said.

The survey was conducted among senior loan officers of 141 euro area banks in all Eurozone countries between September 15 and 30. The survey explored the views regarding changes during the third quarter and expectations of changes in the next three months.

Banks expect further net easing in credit standards on loans to enterprises in the fourth quarter, the survey said. They expect the lending conditions for housing loans to remain largely unchanged, but a modest easing in standards for consumer credit.

Net demand for credit by businesses also rose in the third quarter and businesses are expected to demand more loans in the final three months of the year. The increase in demand was attributed to the low interest rates.

Demand for housing loans and consumer credit also improved. Housing loan demand increased mainly on the back of low interest rates and better housing market prospects. Meanwhile, the regulatory and fiscal regime reportedly had a dampening impact, the survey added.

The survey report also carried results for five largest euro area countries. Credit standards for businesses eased further in Italy, while they remained unchanged in Germany, Spain and the Netherlands. French businesses, meanwhile, had tighter lending conditions.

Dutch banks tightened the lending conditions for housing loans substantially. Banks in Germany and France also raised the standards, but to a lesser extent. However, Spanish and Italian banks eased the credit standards for housing loans.

The survey also found that banks reportedly used the additional liquidity from provided by the ECB's asset purchase programme to grant loans over the past six months.

"The APP had a net easing impact on credit standards and particularly on credit terms and conditions; this easing impact was greatest for loans to enterprises," the survey said.