Euro Zone Corporate Loan Growth Slowing
Eurozone Corporate Loan Growth Slowing
Loans to Eurozone companies have slowed last month, according to European Central Bank data.
The reason for the block’s recession was cited as banks tightened access to credit and new credit flow stopped.
Loans to non-financial companies of 19 countries in the Eurozone fell from 7,4 % in January to 7.0%, the highest level in the last 10 years.
However, with small increases in the bloc’s largest countries (Germany, France and Italy) offset by decreases in other countries, including Spain and the Netherlands, the monthly loan flow to firms was minus 0,2 billion euros.
With the pandemic closing most of the Eurozone economy, firms rushed to state guarantees extended to banks last year with minus 1% and emergency credit lines for Central Bank financing.
Euro Zone Corporate Loan Growth Slowing
Banks maximized their credit limits for fear of not getting their money back. Thus, they constantly tightened their credit standards in order to protect their balance sheets.
“The economic outlook for a steady recovery in business lending remains uncertain. This also means that the investment recovery in the Eurozone continues to face winds in the short term,” said ING economist Bert Colijn.
Household credit has been flat since April, showing a decline from 3,1 % to 3 %. Monthly new loan flows fell to the lowest levels since last April.
The annual growth rate of the M3 money supply measurement, which is mostly a reflection of the ECB’s abundant bond purchases, rose from 12,4 % to 12,5 %in line with market expectations.
Euro Zone Corporate Loan Growth Slowing
Source: Reuters.com
You may also like:
