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Demand for loans from Irish firms rising

Wednesday, October 31 11:26:40

The demand for loans from Irish enterprises increased during the third quarter of 2012, according to the Irish response to the latest Euro Area Bank Lending Survey today.

During the period, credit standards were unchanged in respect of loans to enterprises while standards tightened on loans to households for house purchases as well as consumer credit and other lending during the third quarter of 2012.

The demand for loans in respect of mortgage lending increased during the third quarter of 2012. At the same time loan demand regarding consumer credit and other lending was unchanged.

Access to retail deposits eased during the third quarter of 2012 with a further easing anticipated during the fourth quarter of 2012. For the most part, access to wholesale funding was unchanged.

The European Central Bank said euro-area banks increased tightening of credit standards to businesses in the third quarter and expect a similar degree of tightening in the fourth.

"The impact of risk perceptions on the net tightening of credit standards increased in the third quarter of 2012 compared with the previous quarter," the Frankfurt-based ECB said in the report today.

For the fourth quarter, "banks expect a similar degree of net tightening in credit standards for loans to enterprises and households," it said.

Lending to households and companies in the euro area contracted at the fastest pace in almost three years in September as the 17-nation currency bloc teetered on the edge of recession.

ECB president Mario Draghi said earlier this month that the weak outlook for the economy is weighing on credit demand.