July results of the Bank Lending Survey in Germany
Overall, German credit institutions eased their lending policies somewhat for loans to enterprises in the second quarter of 2015. This was revealed by the latest round of the Bank Lending Survey. Although credit standards remained virtually unchanged on balance, the surveyed banks narrowed their margins on average loans in net terms considerably and on riskier loans markedly. The institutions also moderately eased the other surveyed terms and conditions across the board. Banks' lending policies regarding loans to households saw little change. On balance there was no notable change in credit standards, either for loans for house purchase or for consumer loans. The surveyed credit conditions in the individual credit segments also remained basically unchanged in net terms. The surveyed banks solely narrowed their margins on balance.
According to the data provided by the German banks, demand for loans increased in all of the business lines surveyed, although the increases varied in size in the respective credit segments. For example, demand for loans to enterprises rose slightly on balance, while households' financing needs for house purchase increased substantially. The institutions recorded a considerable rise in demand for consumer credit on balance.
The July survey round contained ad hoc questions on banks' funding conditions, the impact of the new regulatory and supervisory actions (these include, among others, the new regulatory capital requirements set out in the CRR/CRD IV and the requirements resulting from the comprehensive assessment) and the banks' participation in the targeted longer-term refinancing operations (TLTROs) from 2014 to 2016. The German respondent banks once again reported that their funding situation had improved slightly compared with the preceding quarter as a result of the current situation on the financial markets. The banks did not reduce their risk-weighted assets further in the first half of 2015 in connection with the new regulatory and supervisory actions; but they considerably strengthened their capital position once more. The TLTRO in March 2015 met with similarly moderate interest from the surveyed German institutions as three months earlier. Those banks which did participate cited the attractive TLTRO conditions as the reason behind this. They intend to use the funds obtained chiefly for granting loans. The banks anticipate that taking part will improve their financial situation somewhat, but do not expect any effects on their credit standards.
The aggregated results of the Bank Lending Survey for the euro area as a whole show that European institutions' lending standards for loans to enterprises and consumer credit remained largely unchanged. However, credit standards for loans to households for house purchase were eased moderately. There was a marked increase in demand for loans to euro-area enterprises in the second quarter of 2015. The institutions also recorded increases in lending to households. Demand was up substantially in this line of business, both for loans for house purchase and consumer credit.
According to the surveyed banks in the euro area, their funding situation did not improve further on the whole. In the wake of the new regulatory and supervisory actions, banks continued to clearly strengthen their capital position in the first half of 2015. As was the case with the TLTROs in 2014, the TLTRO in March 2015 met with considerably greater interest in the euro area as a whole than it did in Germany. According to respondents' own information, participating banks in the euro area wish to primarily use the funds obtained for lending to enterprises.