Central Bank lending survey
The Central Bank conducts a quarterly lending survey among the four commercial banks. In the survey, the banks are asked for their assessment of developments in credit supply and demand; the factors that, in their opinion, had a decisive impact on supply in the past three months; and their expectations for the coming six months. The results of the most recent survey, conducted during the period 1-14 October 2023, are based on the average of the commercial banks’ responses.
The survey results indicate that the commercial banks’ supply of loans to households has been unchanged in the past three months but that the supply of residential mortgages will increase slightly in the coming six months.1 The results also suggest that household demand for loans has been unchanged over the past three months, apart from a slight uptick in demand for motor vehicle loans. The banks expect household demand for loans to decline slightly over the coming six months. According to the banks’ responses, their rules for lending to households have been unchanged in the past three months and are expected to remain unchanged in the next six months. Competition from other banks for loans to households is projected to ease slightly in the next six months. Interest rates on both indexed and non-indexed household loans rose over the past three months, owing to the increase in the Central Bank’s key rate and to higher bank funding costs. Furthermore, the banks expect both indexed and non-indexed lending rates to keep climbing over the next six months, for the same reasons.
The results indicate that the supply of credit to companies has been unchanged in the past three months and will remain unchanged in the coming six months. Companies’ demand for short- and long-term loans appears to have increased slightly in the past three months; however, all of the banks expect demand to decline over the next six months. According to the commercial banks, their lending rules for loans to companies have not changed in the past three months and are not expected to change in the next six months. The banks expect competition for loans to companies to ease marginally in the next six months. Interest rates offered to companies have risen in the past three months, owing to the increase in the Central Bank’s key rate and to rising funding costs faced by the banks, and the survey suggests that interest rates and credit spreads on corporate loans will increase in the next six months.
See here: Lending Survey
1 In the survey, loans to households are divided into three categories: residential mortgages, motor vehicle loans, and other loans. Loans to businesses are classified as long-term or short-term loans. The banks are also specifically asked about foreign-denominated loans to both households and businesses.