Banks assume easing of lending policy towards enterprises and tightening of lending policy towards households in the first quarter of this year and expect an increase in demand for most types of loans, apart from housing loans, according to a survey conducted by the National Bank of Poland (NBP).
In the first quarter of 2022, banks plan to ease the standards of granting short- and long-term loans to large enterprises as well as short- and long-term loans to the SME sector. […] Forecasts of demand for loans for large enterprises are multidirectional – growth for short- and decline for long-term. Banks expect that in the first quarter of 2022 the SME sector will increase its demand, both for short-term and long-term credit, according to the report entitled “Situation on the credit market – results of the survey to the chairmen of credit committees, Q1 2022.”
In the fourth quarter of 2021, all surveyed banks did not change the criteria for granting short-term and long-term loans to large enterprises. On the other hand, the criteria for short- and long-term lending to small and medium-sized enterprises (SMEs) have been eased again, the report mentioned.
The banks justified the easing of lending policy in Q4 by the improved forecasts of the economic situation in the country and an increase in competitive pressure, mainly from other banks.
The NBP reported that after three quarters of growth in demand for housing loans, in the fourth quarter of 2021 there was a clear reversal of the trend, around 69% of the surveyed banks noticed a decline in demand.
According to the banks, this was mainly due to forecasts regarding the situation on the housing market, changes in consumer spending, deterioration in the economic situation of households and tightening of the terms of granting housing loans, as well as the use of alternative financing sources, including loans from other banks and other sources, the report indicated.
For the first quarter of 2022, the surveyed banks forecast a further tightening of the standards of granting housing loans and a deepening decline in demand for these loans, according to the report.
According to the central bank, the fourth quarter of 2021 was another period of tightening the standards for granting housing loans.
The surveyed banks indicated that the tightening of lending policy was mainly due to the decisions of the Monetary Policy Council, as well as the deterioration of economic forecasts and, not covered by the survey, implementation of the requirements of the amended Recommendation S, including shortening the maximum period for which creditworthiness is tested The banks justified the easing of lending policy by, inter alia, increased competition from other banks and forecasts of the situation on the housing market and a decline in demand for housing loans, the report announced.
Banks have divided opinions as to the directions of changes in the situation on the consumer loan market in the first quarter of 2022. The lending policy criteria are planned to be tightened by around 33%, and to soften by 26% of the banks. Similarly, in the case of forecasts of demand – around 36% of banks expect it to increase and 25% to decline, the central bank reported.
In the fourth quarter of 2021, banks continued the easing of the standards of granting consumer loans, initiated in the second half of 2020. This was mainly due to the decline in demand for consumer loans and the increased competition from other banks.
In the fourth quarter of 2021, after three quarters of increases, banks recorded a decline in demand for consumer loans. In their opinion, the decrease in demand for consumer loans was mainly due to the deterioration of the economic situation of households, as well as the tightening of the terms of granting them, according to the report.
The survey was conducted at the beginning of January 2022 among 23 banks with a total share of claims on enterprises and households in the banking sector portfolio of around 88%.
Source: NBP and ISBnews
