ECB lending survey for April likely to indicate declining credit standards for companies

The April ECB lending survey, which was carried out in March, is expected to indicate easing signs in credit standards for loans to firms, according to Societe Generale. Meanwhile, consumer standards are likely to be majorly unchanged, noted Societe Generale. In the final quarter of 2015, net demand for loans to companies grew significantly, while banks projected this to continue in the first quarter of 2016.

Demand is likely to have softened slightly due to the volatility in global market and uncertain global growth outlook in the beginning of 2016. Especially, loan demand for investment is expected to indicate that it has softened again, albeit accelerate later in 2016.

But, credit conditions for enterprises is expected to have additionally eased, mostly because of competition, with margins on loans reducing more in net terms, said Societe Generale. Also, the rate of rejection for loans to companies is likely to have dropped a bit. Meanwhile, credit demand is expected to be greatly unchanged, added Societe Generale.