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For the first quarter of 2024, Financial institutions expect supply to contract again in the segment of loans to households for consumption and other purposes, while it would not vary in the rest of the modalities. Refering to demand, a new generalized reduction in applications is anticipatedwith a similar intensity or somewhat greater than that recorded between October and December.

This is reflected in the last Bank Loan Survey prepared by the Bank of Spain. It also highlights that, for the first quarter of 2024, financial entities anticipate that the conditions of access to retail markets will not change, while in wholesale markets the trends observed in the last months of 2023 would continue.

Furthermore, for the first half of this year, it is anticipated that defaults could favor a slight general tightening of credit conditions. For this period, it is also anticipated that the contraction of the supply of credit and the decrease in loan applications will continue, although in a more moderate way and affecting only some sectors of activity.

During the fourth quarter of 2023, the survey indicates that concession criteria stopped tightening in Spain or did so more moderately than in previous quarters. Furthermore, the demand for credit decreased again across the board between October and December of last year, although it did so with a lower intensity than in the previous quarter.

Specifically, according to the document, the granting criteria They only tightened in the segment of loans to families for consumption and other purposes, although they did so in a more moderate way than in the previous quarter. As the agency explains, the restrictive evolution of the supply of credit in financing families for consumption and other purposes would respond to the increase in risks perceived by financial entities and, to a lesser extent, to aspects related to bank capital and its cost.

For their part, the general conditions applied to new loans would have continued to tighten across the board, although to a lesser intensity than that recorded three months earlier. In particular, there would have been observed slight increase in margins in the financing segments for companies and households for home purchases. On the other hand, in loans to families for consumption and other purposes, the margins would have narrowed slightly.

As for the percentage of credit applications rejectedthis increased in the segment of financing to households for consumption and other purposes, while it remained stable both in loans granted to companies and in those granted to households for home acquisition.

In the last three months of last year, loan demand fell across all segments, a dynamic that was also observed in the previous three quarters. However, this decrease in demand would have been moderate and less intense than that reported in the previous quarter.

The decrease in requests for funds would be explained, mainly, by the high level of interest rates. In the business financing segment, this effect would have been partially offset by greater needs to finance inventories and working capital. In the case of household loan applications, the decline would also be explained by lower consumer confidence, the greater use of savings and the worse outlook for the housing market.

2024-01-23 10:03:57
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