2023-04-24 03:14:40
The bank is already starting to notice the slowdown in credit that is taking place in the first months of the year. The rise in interest rates is affecting customer demand, especially individuals. And from the financial sector this slowdown is expected to continue in the coming months.
From the Bank of Spain They affirm that a reduction in credit is being observed, especially in relation to mortgages and mainly due to a drop in demand. And it is that private clients are stopping requesting this type of loan due to the rise in interest that they have experienced during the last year.
“What we are observing are reductions in mortgages and companies. We still do not have complete information, but in mortgages we do know that new operations are falling,” he pointed out. Angel EstradaGeneral Director of Financial Stability, Regulation and Resolution of the Bank of Spain, during the presentation of the last Financial Stability Reportlater adding as regards the origin of this stoppage that “a very important element” is the fall in demand due to the rise in rates.
[La banca pronostica que el crédito a empresas será el único que crezca en 2023, con parón en consumo e hipotecas]
Behind this slowdown is also a tightening of credit conditions on the part of the banks, as was already verified in the Bank Loan Survey corresponding to the last quarter of last year, which was published in January.
Among their conclusions, the experts from the Bank of Spain highlighted that at the end of 2022, given the environment of uncertainty for entities, “the criteria for granting loans were generally tightened in Spain for the third consecutive quarter“.
lower demand
However, much of this slowdown has to do with demand. This report indicated that families were requesting loans to purchase housing and for consumption with less intensity, while the demand for business loans had picked up slightly.
Banks are already noticing it at the sector level. “It’s slowing down [el crédito]. Industrial activity is falling slightly and the real estate business is much more stagnant than last year, but we are coming off an enormously attractive year,” he explained. Maria Dolores DancausaCEO of bankinterlast Thursday during the presentation of its results.
[El frenazo económico llega al crédito: los nuevos préstamos de vivienda, consumo y empresas se ralentizan]
The banker also pointed out that it must be taken into account that there is a “certain seasonal component” in the first quarter, since “At the beginning of the year companies invest less”. “We are seeing a slight slowdown,” she added.
in the last Bank Loan Survey of the Bank of Spain, the entities themselves anticipated that the contraction in supply and the general drop in demand for credit would continue in the first quarter of the year.
The trend will continue
And in the coming months this trend will continue. “Looking ahead, we expect an evolution in this line”anticipated Estrada, from the Bank of Spain, last Wednesday.
Not surprisingly, he European Central Bank (ECB) is going to continue raising interest rates in the coming months in its attempt to bring inflation to around 2%. The CPI for the euro zone closed February at 8.5%, with the core at 5.6%. Levels that are still far from the ECB’s target.
For now, the issuing institute is expected to raise interest rates by another 25 basis points at its May meeting, placing them in the range of between 5% and 5.25%, levels not seen since 2007 Then a brake on the rises is anticipated.
The Bank of Spain indicates in the last Financial Stability Report that “in the coming quarters it is expected that the increase in reference rates continue moving to average loan ratesand there are also upward risks to its evolution”. Something that will have a special impact in the case of mortgages.
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