28 April 2025

Central Bank lending survey

The Central Bank conducts quarterly lending surveys among the four commercial banks. In the surveys, the banks are asked for their assessment of developments in supply and demand for credit; the factors that, in their opinion, had a decisive impact on supply in the previous three months; and their expectations for the coming six months. The results of the most recent survey, conducted during the period 1-14 April 2025, are based on the average of the commercial banks’ responses.

Highlights

The survey results indicate that the commercial banks’ supply of loans to households has been unchanged in the past three months but that the supply of residential mortgages is expected to increase slightly in the coming six months.[1] The banks noted a marginal decline in household demand for mortgages in the past three months but expect a slight increase in the next six months.

According to the banks’ responses, their rules for lending to households have been unchanged in the past three months and are expected to remain unchanged in the next six months. Competition with other credit market entities for household loans is expected to increase in the next six months.

Interest rates on inflation-indexed loans to households have risen slightly in the past three months, according to the banks’ responses. The banks expect interest rates on indexed loans to households to decline in the next six months, owing to reduced funding costs, but they expect interest premia on these loans to widen over the same period. Interest rates on non-indexed household loans have fallen in the past three months, according to the survey, and all participants expect a continued decline in the six months ahead. The main drivers are reductions in the Central Bank’s key interest rate and lower funding costs for the banks, although the regulatory framework is expected to have a downward impact as well over the next six months.

The banks state that the supply of corporate credit has increased slightly in the past three months, and they expect it to continue growing in the next six months. According to the banks’ responses, demand for credit among small businesses was unchanged in the past three months. Among large companies, demand for short-term loans declined, while demand for foreign-denominated loans grew. The banks expect large companies’ demand for foreign-denominated loans to continue to increase, but otherwise, they expect demand for corporate credit to hold unchanged in the next six months.

The survey indicates that the banks’ rules on corporate lending were unchanged over the past three months, and no changes are expected in the next six months. The banks also expect competition for loans to companies to increase marginally in the next six months, vis-à-vis other banks and non-bank lenders, and they expect stronger competition from market funding as well.

According to the survey responses, interest rates on inflation-indexed loans to large companies have fallen marginally in the past three months, owing mainly to reductions in the key interest rate. Rates on indexed loans to small companies have been unchanged over the same period, however. The banks expect rates on indexed loans to small and large companies to decline slightly in the six months ahead, owing to a lower key interest rate and reduced funding costs, while the regulatory framework is expected to pull in the opposite direction. Interest rates on non-indexed loans to small and large companies have fallen in the past three months, according to the banks’ responses, due mainly to a lower Central Bank key rate but also to reduced funding costs. The banks expect similar developments in the six months ahead, although the regulatory framework is expected to have an upward impact on rates. Furthermore, rates on foreign-denominated loans to small and large companies have been unchanged in the past three months and are expected to be unchanged in the coming six months.

See further:
A site for lending surveys.

[1] In the survey, loans to households are divided into three categories: residential mortgages, motor vehicle loans, and other loans. Loans to businesses are classified as either long-term or short-term loans. Furthermore, survey participants are asked about foreign-denominated lending to both households and businesses.