FRANKFURT (Reuters) – Euro zone banks expect a slight rebound in demand for mortgages and business loans at the start of the year, for the first time in two years, as credit collapses is starting to moderate, a survey by the European Central Bank (ECB) showed on Tuesday.
The ECB’s quarterly survey on bank credit production showed that banking institutions continued to tighten access to credit during the last quarter of 2023, but that the number of banks reducing access to credit is the most low for two years.
As banks plan to continue tightening lending conditions this quarter, they are also seeing “a slight, net increase” in demand for business loans and mortgages for the first time since the start of 2022 , declared the ECB.
In addition, while conditions have further tightened for consumer credit, they have eased for home loans, according to the survey.
Business lending conditions have “almost not tightened (on net) in services”, but this has been more than offset by “a relatively large net tightening in the commercial real estate, construction and residential real estate.
Bank funding conditions in money markets, long-term deposits and debt securities have improved, with markets starting to anticipate rate cuts from the ECB.
However, financing conditions through current accounts and securitization have tightened slightly.
(Report Francesco Canepa, Corentin Chappron, edited by Blandine Hénault)
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