Euro area companies faced higher borrowing costs in September as the European Central Bank’s average rate on new business loans rose to 3.90%, while home loan rates barely moved.
The ECB said Monday that its composite rate on new loans to non-financial corporations increased 13 basis points from 3.77% in August. The comparable rate on new household loans for home purchases was 3.62%, compared with 3.60% a month earlier. Both measures are annual rates.
The increase was also evident in selected business loans with floating rates or rates fixed initially for no more than three months. Loans exceeding €1 million carried an average rate of 3.51%, up 17 basis points. For loans of up to €250,000, the rate rose eight basis points to 4.01%.
Banks paid more for new deposits with an agreed maturity. The composite rate for companies climbed 23 basis points to 2.48%, while the household rate rose 19 basis points to 2.37%. Rates on overnight deposits were 0.68% for companies and 0.30% for households.
The figures show different effects for customers seeking new loans and those placing money in new term deposits. They do not indicate that every borrower or depositor received the composite rate, which combines rates across types of new business.
An earlier ECB survey of firms found that a net 42% reported higher bank loan rates in April-June, compared with 26% in January-March. That survey recorded firms’ experiences; Monday’s statistics measure rates on new bank loans in September.
Following its Sept. 10 decision, the ECB’s quarter-point increase in all three key rates took effect Sept. 16. It held rates steady on Oct. 29, leaving the deposit facility rate at 2.50%. The September lending and deposit figures do not isolate how much of their monthly change came from the policy increase.
The ECB is scheduled to publish October bank interest rate figures Dec. 2.
