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 July-14 August 2025, are based on the average of the commercial banks’ responses.
Highlights
The survey results indicate that the commercial banks’ supply of residential mortgages to households has increased in the past three months and is expected to grow slightly more in the coming six months.* The banks discerned a marginal increase in household demand for mortgages and motor vehicle loans over the past three months. They expect demand to continue its gradual rise over the next six months, although demand will be weaker for car loans than for mortgages.
According to the responses, the banks have eased their rules for mortgage lending to households in the past three months, citing competition from other banks and non-bank lenders, costs due to their capital position, and their liquidity position. The banks expect their rules to remain unchanged over the next six months. They also expect bank-to-bank competition for household lending to increase marginally in the coming six months.
Interest rates on indexed and non-indexed loans to households have declined in the past three months, and interest premia on non-indexed loans have fallen as well, according to the banks’ responses. The main drivers of these declines are reductions in the Central Bank’s key interest rate and lower funding costs for the banks, although the regulatory framework have also had a downward impact on non-indexed lending rates. Interest rates and interest premia on non-indexed loans are expected to keep falling in the six months ahead, in tandem with expectations of policy rate cuts, lower funding costs, and amendments to the regulatory framework.
The banks state that the supply of corporate credit has increased slightly in the past three months, and they expect this pattern to continue over the next six months. According to the banks’ responses, corporate demand for credit has also increased marginally in the past three months, especially among larger companies. Demand among large companies is also expected to grow slightly in the next six months while demand among small companies is expected to remain unchanged. The banks note a minor increase in supply and demand for foreign-denominated loans, both in the past three months and in the six months ahead.
The banks tightened their corporate lending rules slightly in the past three months, according to the survey, citing the cost of their capital position as the main reason. They do not anticipate changes to lending rules in the coming six months. Furthermore, they expect bank-to-bank competition for corporate lending to stiffen in the six months ahead, and in the case of loans to large companies, they expect competition with non-bank lenders and market-based financing to increase as well.
According to the banks’ responses, interest rates on indexed and non-indexed corporate loans have fallen in the past three months, particularly on non-indexed loans. The main reasons cited are Central Bank interest rate cuts, the banks’ funding costs, and regulatory environment. Interest rates on indexed loans to companies are not expected to change in the six months ahead, as regulatory environment and competition will tend to offset one another. Nevertheless, interest premia on indexed loans to large companies are expected to rise marginally. The banks assume that rates on non-indexed corporate loans will continue to fall, with rates on loans to small companies declining more than on loans to large ones. Interest premia are expected to rise at the same time, however. The decline in interest rates is due mainly to expectations of Central Bank interest rate cuts, plus the banks’ funding costs. According to the banks’ responses, rates on foreign-denominated loans to small and large companies have been unchanged in the past three months. They are expected to be unchanged in the coming six months, although interest premia are projected to increase marginally.
* 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.