Fourth special survey among banks: positive assessment of loan developments on a broad basis
At the turn of the year 2010-11, the Deutsche Bundesbank repeated the special survey which it first conducted among selected German banks in July 2009. Overall, the participating institutions are very optimistic with regard to their lending over the next 12 months. Even taking into account the tighter regulations, the banks surveyed do not currently envisage any bottlenecks concerning bank loans to non-financial corporations.
Overall, survey participants expect a significant increase in loan volume in 2011. The anticipated strong growth in new lending is due in part to the increased use of existing credit lines. By contrast, dampening effects continue to stem from repayments, particularly by larger corporations. The role of write-downs is virtually negligible.
Banks attribute the rise in the loan volume to many factors, in contrast to one year ago. In the majority of cases, they specify, above all, their improved risk assessment during the economic upturn, as well as corporations’ rising demand for investment and export financing. The bank managers plan to keep their rejection rates unchanged in spite of the rising demand.
Despite growth in loans and the expected burdens from the euro-area sovereign debt crisis, the surveyed banks forecast increasing capital ratios for 2011. They aim to increase the ratios predominantly by retaining profits, raising new equity and reducing other risk-weighted assets. In reaction to Basel III, the institutions want to top up their regulatory capital in 2011. However, hardly any adjustments to loans are planned for 2011.
For a detailed description of the special survey and further results, see http://www.bundesbank.de/volkswirtschaft/vo_veroeffentlichungen.en.php.