Eurozone bank sector on mend

AFP, FRANKFURT: Europe’s battered financial sector is showing further signs of mending and banks are increasingly competing for custom by easing credit standards, a key European Central Bank survey showed yesterday.
The ECB said its quarterly bank lending survey (BLS) showed banks are easing credit standards for loans to enterprises, an encouraging sign, since the chronic weakness of credit activity in the euro area has previously been blamed for the absence of any noticeable recovery in the 19 countries that share the single currency.
“In response to the January 2016 bank lending survey (BLS), euro-area banks reported a continued net easing of credit standards on loans to enterprises in the fourth quarter of 2015,” the ECB report said.
It conceded that the easing was “slightly less pronounced than banks’ expectations in the previous survey round.”
But “competitive pressures were the main factor behind this easing,” it added.
Banks reported a net easing of credit standards on loans to households for house purchase, again due to competitive pressures, it said.
Demand for loans is also increasing, the ECB found.
“Net demand across all loan categories continued to rise, especially for loans to enterprises,” the survey showed.
“The low general level of interest rates contributed most to the increase in loan demand. For loans to enterprises, financing needs for working capital and fixed investment were further contributors to stronger demand. For housing loans, consumer confidence and housing market prospects additionally underpinned loan demand.”

 

Eurozone bank sector on mend

AFP, FRANKFURT: Europes battered financial sector is showing further signs of mending and banks are increasingly competing for custom by easing credit standards, a key European Central Bank survey showed yesterday. The ECB said its quarterly bank lending survey (BLS) showed banks are easing credit standards for loans to enterprises, an encouraging sign, since the chronic weakness of credit activity in the euro area has previously been blamed for the absence of any noticeable recovery in the 19 countries that share the single currency. In response to the January 2016 bank lending survey (BLS), euro-area banks reported a continued net easing of credit standards on loans to enterprises in the fourth quarter of 2015, the ECB report said. It conceded that the easing was slightly less pronounced than banks expectations in the previous survey round. But competitive pressures were the main factor behind this easing, it added. Banks reported a net easing of credit standards on loans to households for house purchase, again due to competitive pressures, it said. Demand for loans is also increasing, the ECB found. Net demand across all loan categories continued to rise, especially for loans to enterprises, the survey showed. The low general level of interest rates contributed most to the increase in loan demand. For loans to enterprises, financing needs for working capital and fixed investment were further contributors to stronger demand. For housing loans, consumer confidence and housing market prospects additionally underpinned loan demand.