Statistical News Release: Credit standards for loans to enterprises eased for the first time since early 2015

Statistical news
Datum 29 oktober 2018

Dutch banks reported eased credit standards, i.e. banks’ internal guidelines on loan approval criteria, for loans to enterprises in the third quarter of 2018. In addition, demand for such loans increased over the past quarter. This emerged from the quarterly Bank Lending Survey (BLS), which analyses the perceptions Dutch-based banks' have of the credit standards they apply when approving loans as well as of demand for bank loans.

Credit standards for loans to enterprises eased

On balance, 26% of Dutch banks reported eased credit standards for loans to enterprises in the third quarter of 2018. This is the first time since early 2015 that an easing is reported. In terms of firm size, credit standards eased for both loans to small and medium-sized enterprises and loans to large firms. As regards loan maturity, credit standards eased both for short-term and – for the first time in two years – long-term loans. Competitive pressure and lower risk perceptions were reported as the main factors contributing to the easing of credit standards.

Not only Dutch banks, but also banks in Germany, Spain and Italy reported a relaxation of standards for corporate loans in the third quarter of 2018. (See The euro area bank lending survey, third quarter of 2018).

Increase in demand for loans to enterprises

On balance, 43% of Dutch banks reported increased demand for loans to enterprises in the third quarter of 2018. This was mainly driven by the low general level of interest rates and high levels of finance required for fixed investment, inventories and working capital, M&A activities and debt restructuring.

Increased demand for corporate loans and the easing of credit standards for this type of loans point to an expansion of the Dutch economy in general, and the Dutch corporate sector in particular. These trends are consistent with projected capacity utilisation increases and the results of other surveys, in which fewer enterprises reported financial constraints on output. (See Economic Developments and Outlook, June 2018).

Figure 1: Dutch banks' loans to enterprises: changes in credit standards and demand
(net weighted percentages of Dutch banks)

Figure 1: Dutch banks' loans to enterprises: changes in credit standards and demand

 
Source: Bank Lending Survey

Note: The Dutch banks’ responses in the BLS survey are weighted according to their shares in the market segment concerned. The outcomes are expressed as net weighted percentages. A net weighted percentage is the weighted sum of the number of banks that reported tightened standards or increased demand minus the weighted sum of the number of banks that reported eased standards or reduced demand. See our statistics website for more information on the outcome of the BLS survey for the Netherlands.