Banks anticipate an increase in families’ search for credit

  • ECO News
  • 24 October 2017

A survey on the Portuguese credit market foresees an increase of families' demand in the last quarter of the year, while companies' should maintain. The granting criteria should remain unchanged.

Although banks don’t anticipate many changes in their granting criteria, they believe there will be a slight increase in the search for credit from privates in the last quarter of the year. This is one of the main conclusions from banks’ quarterly survey on the credit market disclosed this Tuesday by the Bank of Portugal. As for companies, they are expected to remain pretty much the same concerning demand and criteria.

In the privates segment, the entity headed by Carlos Costa says that “For the fourth quarter of 2017, participating institutions do not foresee, in general, changes in firms’ demand for loans”, and that, “in the case of households, three institutions expect a slight increase in the demand for loans for house purchase and for consumption and other purposes”. Concerning companies‘ segment, the Bank of Portugal adds that “in the third quarter of 2017, credit demand by firms remained essentially unchanged for most institutions”.

However, the Bank of Portugal’s answers point to the fact that in the last quarter of this year, “the surveyed institutions do not anticipate adjustments in credit standards applied on loans to firms and households”.

The results of the survey continue showing the trend from the past few months, in which credit granting has been increasing for privates; simultaneously, companies are not resorting more to banking financing.

In August, the weight of families in the new credit reached its highest peak in over 11 years: according to data disclosed by the entity headed by Carlos Costa, financial institutions granted a total of 1,205 million euros in new credit to families. This amount corresponds to 37.1% from a total of 3,250 million euros in new loans granted to families and companies. This is the highest proportion since May of 2006, the month in which credit to families represented 39% of the total of loans granted.