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Timid recovery in demand for credit

05/08/2015 11:50
The new figures announced by the European Central Bank indicate a timid and gradual recovery of demand for credit.

The new ECB data show that the heavy promotion of new loans by the banks as well as lower interest rates are helping to slowly eliminate risk aversion by both borrowers and credit institutions alike.

The new mortgages rose in the first half of 2015 by 5.1% to €290 mn from €276 mn in the corresponding period last year.

The demand is far behind that seen in the period of property bubble but it creates expectations for an improvement in the financial conditions.

In the first half of 2010 the new mortgages stood at €1601 mn.

In June 2015, €57 mn were granted to the market in new mortgages against €54 mn in May and €46 mn in April 2015.

As for new consumer loans, the differentiation is insignificant. They increased by 2.1% to €49 mn in the first six months of the year from €48 mn last year.

Things are clearer among larger corporations, which, despite the high leveraging, have started to become more active in the credit market. New business loans over €1 mn in the first half of 2015 stood at €603 mn from €458 mn in the first half of 2014 recording an increase of 31.7%. In the first half of 2010 they had reached €509 mn. In June 2015 loans of more than €1 mn amounted to €119 mn against €80 mn in May and €82 mn in April.

The SMEs Jeremie programs agreed between the banks and the European Investment Fund contributed to the increase in demand for business loans.

According to latest Central Bank data, total loans in the banking system at the end of June 2015 stood at €62.55 bn from €61.45 bn in June 2014.

The large volume of problem loans of nearly €27.5 bn is an impediment to borrowers’ ability to get new credit.