Credit growth in the euro zone on a broad base

As can be seen in the banking statistics of the European Central Bank, commercial banks in the euro zone have visibly accelerated their credit growth in 2017. Private sector loans adjusted for sales, securitisations and fictitious cash pooling activities climbed by 2.8 percent and corporate sector loans even by 2.9 percent. All in all, credit growth that is driven by property financing and corporate investments has achieved a broad base.

However, despite progress in stabilising the markets of Southern Europe, considerable regional differences still exist: While corporate sector loans in France (+6.3 percent) and Germany (+4.2) climbed substantially, growth in Italy (+0.5) was fairly subdued and in Spain (-0.1) even a slight decline was registered.

Given the consistently benign economic environment, a momentum similar to that of 2017 can be expected again this year. In Germany, the largest sub-market, the growth forces continue to shift away from private property financing towards corporate client loans. This is being signalled by the decline in building permits for residential property while the capacity utilization of companies is on the rise.

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