BANK LENDING SURVEY (BLS) 1

Transcription

1 CENTRAL BANK OF CYPRUS EUROSYSTEM BANK LENDING SURVEY (BLS) 1 July 218 Executive summary 2 Loan supply (credit standards) Credit standards for to enterprises and households in Cyprus remained unchanged in compared with 218Q1. In contrast, the corresponding credit standards in the euro area were eased for the period under review. According to the expectations of participating domestic banks for 218Q3, credit standards in Cyprus are expected to remain unchanged for all loan categories. As for the euro area, credit standards for to enterprises and households are expected to ease further in 218Q3. Loan demand Net loan demand by both enterprises and households in Cyprus increased further in, in conjunction with the ongoing increase in domestic economic activity, the small increase in wages, the continuation of new loan contracts and the historically low domestic interest rates. Similarly, an increase in net loan demand was also recorded by all loan categories in the euro area for the period under review. In 218Q3 participating banks expect a further increase in net loan demand by enterprises and households in both Cyprus and the euro area. Expectations of a further increase in net loan demand in Cyprus are perceived to be a signal of continued solid economic growth in the quarters to come. Summary of BLS results July 218 Credit standards for Enterprises Households 218Q3 (expectations) 218Q3 (expectations) Unchanged Unchanged Easing Easing - Housing Unchanged Unchanged Easing Easing - Consumer credit and other lending Demand for Enterprises Households Unchanged Unchanged Easing Easing Increase Increase Increase Increase - Housing Increase Increase Increase Increase - Consumer credit and other lending Source: CBC, ECB(SDW) Cyprus euro area Increase Increase Increase Increase Note: The above results list the changes that occurred in the last three months (in this case ) and the changes that are expected for the next three months (i.e. 218Q3). The measure used for the statistical analysis of this research is the diffusion index. For comparison purposes and further analysis, Charts 1-6 illustrate the trend in developments in credit standards, terms and conditions as well as net demand for by enterprises and households in both Cyprus and the euro area. Appendices 1-3 provide further background information. 1 This is an abbreviated translation of the original Greek version. 2 More detailed analysis of the results of the Bank Lending Survey for the euro area is available at:

2 CENTRAL BANK OF CYPRUS EUROSYSTEM 1. Loans or credit lines to enterprises CHART 1 Credit standards: to enterprises CHART 2 Demand: to enterprises 5 Cyprus - realised euro area - expected Cyprus - expected euro area - realised 5 Cyprus - realised Cyprus - expected euro area - realised euro area - expected "tightening" -1 "easing" Q1 214Q2 214Q3 Source: CBC, ECB(SDW) 214Q4 215Q1 215Q2 215Q3 215Q4 216Q1 216Q2 216Q3 217Q1 217Q3 217Q4 218Q1 218Q Q1 214Q2 214Q3 214Q4 Source: CBC, ECB(SDW) 215Q1 215Q2 215Q3 215Q4 216Q1 216Q2 216Q3 217Q1 217Q3 217Q4 218Q1 218Q3 2. Loans to households CHART 3 Credit standards: to households for house purchase CHART 4 Demand: to households for house purchase Q1 Cyprus - realised euro area - realised euro area - expected Cyprus - expected "tightening" "easing" 214Q2 214Q3 214Q4 Source:CBC, ECB(SDW) 218Q1 217Q4 217Q3 217Q1 216Q3 216Q2 216Q1 215Q4 215Q3 215Q2 215Q1 218Q Cyprus - realised Cyprus - expected euro area - realised euro area - expected 218Q1 217Q4 217Q3 217Q1 216Q3 216Q2 216Q1 215Q4 215Q3 215Q2 215Q1 214Q4 214Q3 214Q2 214Q1 Source:CBC, ECB(SDW) 218Q3 CHART 5 Credit standards: to households for consumer credit and other lending CHART 6Demand: to households for consumer credit and other lending Q1 "tightening" "easing" 214Q2 Cyprus - realised euro area - expected Cyprus - expected euro area - realised 214Q3 214Q4 215Q1 215Q2 215Q3 215Q4 216Q1 216Q2 216Q3 217Q1 217Q3 217Q4 218Q1 218Q Q1 214Q2 214Q3 Cyprus - realised Cyprus - expected euro area - realised euro area - expected 214Q4 215Q1 215Q2 215Q3 215Q4 216Q1 216Q2 216Q3 217Q1 217Q3 217Q4 218Q1 218Q3 Source:CBC, ECB (SDW) Source: CBC, ECB (SDW)

3 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 218Q3 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 Bank Lending Survey July 218 Appendix 1. Loans or credit lines to enterprises from MFI in Cyprus (diffusion index) (A) Supply - Main factors affecting credit standards as applied to the approval of or credit lines to enterprises Credit standards "tightening" "easing" expectations Costs related to banks' capital position Ability to access market financing Banks' liquidity position Competition from other banks Competition from non-banks Competition from market financing General economic situation and outlook Industry or firm-specific outlook Risk on the collateral demanded Banks' risk tolerance (B) Supply - Terms and conditions for approving or credit lines to enterprises 6 2 Overall 6 2 Banks' margin on average 6 2 Banks' margin on riskier 6 2 Non-interest rate charges 6 2 Size of the loan or credit line 6 2 Collateral requirements 6 2 Loan covenants 6 2 Maturity Main factors affecting terms and conditions for approving or credit lines to enterprises Cost of funds and balance sheet constraints Pressure from competition Perception of risk Bank's risk tolerance 3

4 216Q3 217Q1 217Q3 217Q4 218Q1 218Q3 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 Bank Lending Survey July 218 (C) Demand - Main factors affecting the demand for or credit lines to enterprises Demand Expectations Fixed investment Inventories and working capital Mergers/acquisitions and corporate restructuring General level of interest rates Debt restructuring Internal financing Loans from other banks Loans from non-banks Issuance of debt securities Issuance of equity Note: In those cases where no bar is evident in the graph, the diffusion index is for the respective quarter implying; (1) no change was recorded compared with the previous quarter; (2) the banks responses cancel each other out; or (3) the banks responded by stating N/A (not applicable). 4

5 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 218Q3 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 Bank Lending Survey July 218 Appendix 2. Loans to households for house purchase from MFI in Cyprus (diffusion index) (A) Supply - Main factors affecting credit standards as applied to the approval of to households for house purchase CR EDIT STANDARDS ''tightening" "easing" EXPEC TATIONS Cost of funds and balance sheet constraints Competition from other banks Competition from nonbanks General economic situation and outlook Housing market prospects Borrower's creditworthiness Banks' risk tolerance (B) Supply - Terms and conditions for approving to households for house purchase Overall Banks' margin on average Banks' margin on riskier Collateral requirements Loan to value ratio Other loan size limits Maturity Non-interest rate charges Main factors affecting terms and conditions for approving or credit lines to households for house purchase Cost of funds and balance sheet constraints Pressure from competition Perception of risk Bank's risk tolerance

6 216Q3 217Q1 217Q3 217Q4 218Q1 218Q3 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 Bank Lending Survey July 218 (C) Demand - Main factors affecting the demand for by households for house purchase DEMAND EXPEC TATIONS Housing market prospects Consumer confidence General level of interest rates Debt refinancing/restructuring and renegotiation Regulatory and fiscal regime of housing markets Internal finance out of savings/down payment Loans from other banks Other sources of finance Note: In those cases where no bar is evident in the graph, the diffusion index is for the respective quarter implying; (1) no change was recorded compared with the previous quarter; (2) the banks responses cancel each other out; or (3) the banks responded by stating N/A (not applicable). 6

7 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 218Q3 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 Bank Lending Survey July 218 Appendix 3. Loans to households for consumer credit and other lending from MFI in Cyprus (diffusion index) (A) Supply - Main factors affecting credit standards as applied to the approval of to households for consumer credit and other lending CREDIT STANDARDS EXPECTATIONS Cost of funds and balance sheet constraints Competition from other banks Competition from nonbanks General economic situation and outlook Creditworthiness of consumers Risk on the collateral demanded Banks' risk tolerance ''tightening" ''easing" (B) Supply - Terms and conditions for approving to households for consumer credit and other lending Overall Banks' margin on average Banks' margin on riskier Collateral requirements Size of the loan Maturity Non-interest rate charges Main factors affecting terms and conditions for approving or credit lines to households for consumer credit and other lending Cost of funds and balance sheet constraints Pressure from competition Perception of risk Bank's risk tolerance

8 216Q3 217Q1 217Q3 217Q4 218Q1 218Q3 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 216Q3 217Q1 217Q3 217Q4 218Q1 Bank Lending Survey July 218 (C) Demand - Main factors affecting the demand for by households for consumer credit and other lending DEMAND EXPEC TATIONS Spending on durable consumer goods Consumer confidence General level of interest rates Mortgage equity withdrawal Internal finance out of savings Loans from other banks Other sources of finance Note: In those cases where no bar is evident in the graph, the diffusion index is for the respective quarter implying; (1) no change was recorded compared with the previous quarter; (2) the banks responses cancel each other out; or (3) the banks responded by stating N/A (not applicable). 8

9 CENTRAL BANK OF CYPRUS EUROSYSTEM Notes: The Bank Lending Survey is a qualitative survey for the assessment of credit conditions in the euro area and its main objective is to enhance the understanding of bank lending behavior. The survey questionnaire is addressed to senior loan officers in a representative sample of euro area banks and covers a broad area of relevant subjects regarding credit to enterprises and households. For example, it includes questions concerning credit standards, credit terms and conditions as applied to the approval of as well as questions concerning the evaluation by banks of factors affecting demand. More information on the methodology of the survey can be found at: In order to enhance the information content of the survey, a revised BLS questionnaire and compilation guide were introduced in April 215. The results of July 218 Bank Lending Survey relate to changes in compared with the previous quarter and to changes expected in 218Q3 regarding credit standards and demand for to/by enterprises and households 1. It should be noted that the results of the survey relate to answers provided by the participating banks and represent their own assessment of the financial market. The results do not in any way reflect the views of the Central Bank of Cyprus. 1. The results of the survey for Cyprus are not weighted by the market share of each participating bank, thus the answers of all participants are given the same weight. The survey covers around 9% of the total market for outstanding in Cyprus granted to euro area enterprises and households. For the analysis of the aggregated results for Cyprus and the euro area, the diffusion index is used. It should be noted that a diffusion index value equal to zero may imply that; (a) there was no change compared with the previous quarter; (b) the answers of the participating banks offset one another; or (c) no data are available.