09 April 2019

ECB: Results of the April 2019 euro area bank lending survey

Credit standards broadly unchanged for loans to enterprises and tightened for housing loans. Firms’ demand for loans stable, while housing loan demand continued to increase. ECB’s asset purchases continue to support bank lending volumes.

Credit standards – i.e. banks’ internal guidelines or loan approval criteria – for loans to enterprises remained broadly unchanged in the first quarter of 2019, according to the April 2019 bank lending survey (BLS). This was somewhat more favourable than expected by banks in the previous survey round. Credit standards for loans to households for house purchase tightened and credit standards for consumer credit and other lending to households continued to tighten slightly.

Banks’ cost of funds and balance sheet constraints contributed to a tightening of credit standards across loan categories, while competitive pressures continued to contribute to an easing of credit standards. Risk perceptions had a mixed impact, while banks’ risk tolerance had a neutral impact overall. For the second quarter of 2019, banks expect an easing of credit standards for loans to enterprises and consumer credit, and a further tightening of credit standards for housing loans.

Banks’ overall terms and conditions – i.e. the actual terms and conditions agreed in loan contracts – on new loans to enterprises and housing loans remained broadly unchanged in the first quarter of 2019.

Net demand for loans to enterprises remained stable in the first quarter of 2019, after having increased since the second quarter of 2015. This development is broadly in line with banks’ expected moderation of demand in the previous survey round.

As regards the impact of the ECB’s asset purchase programme (APP), the euro area banks that were surveyed reported that the APP continued to have a positive impact on their liquidity position and market financing conditions and a negative impact on their profitability over the past six months, which included the Eurosystem’s net asset purchases until December 2018. In addition, the APP had an easing impact on banks’ credit terms and conditions and a positive impact on their lending volumes over the past six months according to reporting banks.

Press release

Bank lending survey

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