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24 April 2018

ECB: Results of the April 2018 euro area bank lending survey


Loan growth continued to be supported by easing credit standards and increasing demand. Credit standards eased considerably for loans to enterprises and housing loans. ECB asset purchases and negative deposit facility rate have a positive impact on lending volumes.

Credit standards for loans to enterprises eased considerably in net terms in the first quarter of 2018, according to the April 2018 bank lending survey (BLS). The net easing (-8%) of credit standards – i.e. banks’ internal guidelines or loan approval criteria – follows on from unchanged credit standards (0%) for loans to enterprises in the previous quarter and was stronger than anticipated by banks in the previous survey round.

Across the three segments, competitive pressure, risk perceptions and banks’ risk tolerance had an easing impact on credit standards, while banks’ cost of funds and balance sheet constraints were broadly neutral. For the second quarter of 2018, banks expect a net easing of credit standards in all three segments.

Banks’ overall terms and conditions (i.e. banks’ actual terms and conditions agreed in the loan contract) on new loans eased across all loan categories in the first quarter of 2018, driven mainly by a narrowing of margins on average loans. In addition, margins on riskier loans eased for loans to enterprises and loans to households for house purchase.

Net demand continued to increase across all loan categories in the first quarter of 2018. The net increase in demand for loans to enterprises was attributable mainly to fixed investment, M&A activity and the general level of interest rates.

With regard to the impact of the ECB’s asset purchase programme (APP), the euro area banks surveyed reported that the APP had a positive impact on their assets, liquidity position and market financing conditions over the past six months, but a negative impact on their profitability as a result of lower net interest margins.

Press release



© ECB - European Central Bank


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