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Czech bank survey sees lending conditions for firms easing in Q4
October 20, 2014 / 10:32 AM / 3 years ago

Czech bank survey sees lending conditions for firms easing in Q4

PRAGUE, Oct 20 (Reuters) - Czech banks expect lending conditions for companies to ease in the final quarter of the year and demand to pick up, the central bank’s quarterly lending survey showed on Monday.

“Banks expect credit standards for approving all types of corporate loans to ease further in 2014 Q4,” the survey said. “According to banks’ expectations, corporate demand for loans will also rise, in particular among medium-sized corporations.”

Average interest margins fell in all credit segments in the third quarter, it said, with competitive pressure and a better economic outlook affecting the corporate segment.

The survey showed that lenders also see renewed demand for mortgages in the fourth quarter and easier lending conditions, while demand for consumer credit such as car loans should continue to decline.

Czech banks’ interest income has been squeezed in recent years due to the central bank cutting official rates to near zero to aid an economy that exited a recession in early 2013. They must also contend with the bank’s policy of keeping the crown currency weak, which should stay in place until 2016.

While the export-reliant Czech economy grew 2.5 percent year-on-year in the second quarter, demand for loans has been slow to recover.

Komercni Banka, the third biggest Czech bank by assets, sees overall loan growth of 3 percent this year before a rise in corporate demand lifts growth to 5-6 percent in 2015.

Reporting by Jason Hovet; Editing by Catherine Evans

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