Deutschland: Konjunktureintrübung schlägt sich zunehmend im Kreditgeschäft nieder

The economic downturn, which is affecting export-oriented German industry in particular, is increasingly affecting the business of banks in Germany. According to the ECB’s July Bank Lending Survey, for the second consecutive year the banks surveyed reported tightening up their corporate credit policies. More loan applications were rejected and the margins for riskier loans increased. Large companies were more affected. This is due to a deterioration in the situation of various companies and sectors, resulting in a decline in creditworthiness.

The survey results support our assessment that the extremely dynamic growth of the credit markets in Germany will slow noticeably this year. Most recently, corporate customer loan portfolios rose by 6.1 per cent (end of Q1/2019) and private housing loans by 4.9 per cent.

No further tightening of credit guidelines is planned in the corporate customer lending business for the next three months. However, the majority of banks expect demand for credit from large companies to fall. Private housing loans, driven by low interest rates, remain the mainstay of the lending business. Here, the banks had recently relaxed their lending guidelines. A shrinking but still clear majority of credit institutions anticipate a rising demand for credit from private households in the coming months. A small majority of banks are even planning further easing of the conditions for private real estate loans.

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