Credit demand expected to surge

CREDIT demand for corporate activity on a Europe-wide basis is expected to surge over the current quarter, following inactivity in bank lending.

The latest quarterly bank lending survey from the ECB covering the three months to the end of June showed credit flow was tight, partially prompted by a 2% net fall in demand from the corporate sector.

However, Ernst & Young said this quarter is likely to see higher demand, bolstered by a rise in the appetite to fund inventory purchases and in general mergers and acquisitions.

It expects demand levels for bank lending to increase by nearly 30% this quarter. “There are some clear differences from what we’re seeing in the market between how larger and smaller borrowers are able to access credit.

“Larger businesses have a wider variety of options — bonds for example. Medium and smaller-sized businesses will find the expected tightening of supply and the overall rise in demand will make access to funding more difficult in coming months,” according to Ernst & Young’s Luke Reeve.

The Central Bank says corporate credit standards remained unchanged, while mortgage lending tightened marginally in the second quarter.

“The demand for loans from enterprises and households weakened across all categories examined. In contrast to the previous two rounds of the bank lending survey, access to wholesale funding markets deteriorated across the maturity spectrum with the exception of the market for credit risk transfer,” the Central Bank added.


Do you want to be a self-sufficient gardener? Think chickens, solar power and foraging, says Hannah StephensonWant to make an urban garden more eco-friendly? Think chickens, solar power and foraging

Good nutrition right can make a vital difference on the pitch. Clodagh Finn talks to performance nutritionist Emma Tester who is responsible for crafting bespoke diet plans for Munster playersGame on: Performance nutrition delivers results on the pitch for Munster Rugby

Good news! Teenagers are drinking and smoking less! But before we get too comfortable, they’re exercising less too.Secret Diary of an Irish Teacher: Teens aren't looking after themselves because they don’t feel looked after

Five days after arriving in Colombia, Fiona Barry and Keith Ward met a rescue pup called Gracie, who gave them paws for thought, says Paula Burns.Puppy love: Irish couple on dream trip campaign to save Colombian pups

More From The Irish Examiner