Spain 
Italy 
Greece 
Banks Are Tightening Lending (And Will Continue to Do So)
23 October 2018
A survey by the Bank of Portugal revealed that most banks in the country have said that they are tightening lending standards, both for housing and consumer loans. They are expected to tighten even more.
Most of Portugal’s banks have ensured the Bank of Portugal that they are tightening lending standards for both housing and consumer loans. The tightening is a result of the Bank of Portugal’s macro-prudential measures, which came into force in July, according to the latest survey of Portugal’s lending institutions, published Tuesday. The process is expected to continue, as “some institutions stated that they would further restrict lending criteria covering individuals” in the last quarter of the year.
“Most institutions reported more restrictive approval criteria for loans to individuals, both in housing loans and consumer credit,” the Bank of Portugal reported, adding that “the main factor that banks indicated to explain the greater restrictiveness in lending to individuals was the compliance with the Bank of Portugal’s macro-prudential measures targeting housing and consumption.
On the demand side of private customers, “most institutions reported an increase in demand for housing loans and a stabilisation in demand for credit for consumption. The increase in consumer confidence, the outlook for the housing market and the level of interest rates have been the main drivers of trends in existing demand for housing loans.”
On the corporate lending side, “three banks reported a slight decrease in spreads on medium-risk loans in both the Small and Medium Enterprises (SME) segment and in the large corporate segment.” In addition, “one bank reported a slight increase in demand for loans by large corporations and two banks reported marginally higher demand for long-term loans.”
Original Story: Observador – Edgar Caetano
Photo: Manuel de Almeida / Lusa
Translation: Richard Turner