Higher Household and Corporate Credit Demand

Norges Bank’s bank lending survey for 2011 Q2 was conducted in the period of 27 June – 11 April 2011. Participating banks were asked to assess developments in credit standards and credit demand in 2011 Q2 compared with 2011 Q1 and expected developments in 2011 Q3 compared with 2011 Q2.

Lending to households

Banks reported somewhat higher total household credit demand in both 2011 Q1 and 2011 Q2. However, in the same quarters, they had expected that demand would be approximately unchanged. The higher demand comprised various types of loans secured on dwellings (repayment loans, home equity lines of credit and first-home mortgages). Banks expect broadly unchanged total household credit demand in 2011 Q3.

Overall credit standards for households were also unchanged in 2011 Q2. Banks expect unchanged credit standards for households in the period ahead. Participating banks reported falling lending margins in 2011 Q2, although to a greater extent than expected. Lending margins are expected to increase in the period ahead. Fees are also expected to increase somewhat ahead.

Lending to enterprises

Banks reported that corporate credit demand increased somewhat in 2011 Q2. The increase was smaller than expected. Banks expect a further increase in overall corporate credit demand ahead. Banks’ credit standards for enterprises were unchanged in 2011 Q2. Banks expect that capital adequacy ratios may lead to slightly tighter credit standards for enterprises ahead. They also reported somewhat reduced lending margins on corporate loans in 2011 Q2. Lending margins are also expected to decline somewhat in 2011.

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