As the European Central Bank’s latest Bank Lending Survey (BLS) reveals, banks are optimistic as far as lending in the eurozone over the next few months is concerned. The majority of those polled expect increasing demand for both corporate loans and private mortgages. However, there are fewer and fewer optimists. With regard to corporate loans, only a tiny majority believe there will be growing demand.
At the same time, banks are becoming more cautious in granting loans. Whereas in autumn 2018 the intention to ease lending guidelines prevailed, there is now a slender majority in both client segments in favour of tightening their credit guidelines in the next six months.
German banks too are becoming less optimistic as regards the demand for loans, and caution is increasing. The results thus reflect the darkening mood in the past few months in terms of economic prospects. At the same time, they confirm our opinion that the European, and in particular the German loan market will continue to grow this year, but that the growth rate will decline.