Demand for mortgage lending rises
Central Bank expects lending criteria to become more onerous into the fourth quarter
Demand for mortgages grew again in the third quarter of 2013 according to the Central Bank.
Demand for mortgages grew in the third quarter of 2013 - the sixth succesive increase - while consumer lending also advanced, according to new data from the Central Bank. However, credit requirements tightened during the period, as banks changed desired loan-to-value ratios. Credit standards were unchanged for other forms of consumer lending.
During the fourth quarter of 2013, credit standards are expected to tighten somewhat with respect to mortgage lending, but remain unchanged with respect to consumer credit and other lending.
When it comes to lending to businesses, credit standards were again unchanged, for the sixth successive quarter. However, there were some signs of credit standards easing, including costs of funds and balance sheet constraints, pressure from competition and the banks’ perception of risk. While overall demand for loans was unchanged, short-term loans decreased and demand for long-term loans increased.
“Inventories and working capital were seen as contributing to a decline in demand for loans from enterprises while debt restructuring was seen as a factor affecting the increase in demand for loans,” the Central Bank said.
Finally, access to retail and wholesale funding markets improved somewhat across all funding categories during the third quarter of 2013 and is expected to improve again during the final quarter of 2013, as recent developments in the sovereign debt market contributed to an easing in banks’ funding conditions.