ECONOMY

Credit standards for loans stay unchanged

credit-standards-for-loans-stay-unchanged

The credit standards for loans to non-financial corporations (NFCs) remained unchanged, and banks expect that they will continue to remain unchanged in the third quarter of 2021, the Bank of Greece said in a report that was published on Tuesday.

The central bank said that the terms and conditions for corporate loans remained basically unchanged, while the overall demand for loans to NFCs increased slightly.

The credit standards as well as the terms and conditions for loans to households also remained the same, while the demand for both housing and consumer credit increased at a moderate pace.

In the second quarter of 2021, the credit standards for loans to NFCs were the same as they were in the first quarter of the year, in line with the expectations expressed in the previous quarterly survey. Moreover, banks expect that credit standards will continue to stay as is during the third quarter of 2021.

The overall terms and conditions for loans to NFCs remained practically the same compared with the first quarter of the year. Overall demand for loans to NFCs rose somewhat due to increased financing needs for fixed investments and working capital, the report said.

During the current quarter (July-September 2021), the overall demand for both short-term and long-term loans to NFCs is expected to increase somewhat. In the second quarter, the ratio of rejected applications for loans to NFCs remained basically unchanged compared with the previous quarter.

Also in the April-June 2021 period, the credit standards as well as the terms and conditions for loans to households remained unchanged compared with the first quarter of the year, in line with the expectations expressed in the previous quarterly survey round.

The overall demand for housing and consumer credit increased somewhat compared with the first quarter of 2021. The improvement in consumer confidence is seen to have contributed to the increase in demand.

During the current quarter, the demand for housing loans is expected to remain almost unchanged, while the demand for consumer loans is expected to increase by a little. The ratio of rejected applications for loans to households remained basically the same during the second quarter of 2021 compared with the previous quarter.