Broadly unchanged credit demand
- Series:
- Survey of Bank Lending
- Number:
- 1/2022
Household and corporate credit demand was approximately unchanged in 2022 Q1. For Q2, banks expect slightly lower demand from households. Overall credit standards were broadly unchanged in Q1. Banks report slightly lower residential mortgage lending margins and slightly higher corporate lending margins in Q1. At the same time, funding costs and lending rates increased somewhat for both residential mortgage and corporate loans and are expected to increase somewhat further in Q2.
Households
Overall, banks report that residential mortgage demand was approximately unchanged in 2022 Q1 compared with 2021 Q4 (Chart 1). For Q2, banks expect slightly lower residential mortgage demand. Demand for fixed rate loans increased slightly in Q1 and banks also expect a slight increase in Q2.
Credit standards for households were approximately unchanged in Q1, and banks expect no change in Q2 (Chart 1). However, some banks expect the use of interest-only periods to increase somewhat in Q2.
Chart 1
Overall residential mortgage demand, credit standards and lending margins
Banks reported slightly lower residential mortgage lending margins in Q1 (Chart 1). The decline was less pronounced than in the two preceding quarters. Funding costs and lending rates increased somewhat in Q1 (Chart 2). Banks also expect both funding costs and lending rates to increase somewhat in Q2, while lending margins are expected to be little changed.
Chart 2
Banks’ operating environment, lending margins and lending rates. Residential mortgage loans
Enterprises
For non-financial enterprises, banks overall reported unchanged credit demand and credit standards in 2022 Q1 (Chart 3). Banks expect no change in Q2. In their responses to topical questions, several banks commented that they had not changed their credit standards for certain sectors as a result of the war in Ukraine, but that they were paying close attention to vulnerable enterprises. Credit line utilisation and demand for fixed rate and commercial real estate (CRE) loans were also unchanged in Q1. Banks expect slightly lower demand for CRE loans in Q2.
Chart 3
Overall demand, credit standards and lending margins. Non-financial enterprises
Banks further reported that lending margins on corporate loans increased slightly in Q1 (Chart 3). Both funding costs and lending rates increased somewhat (Chart 4). The rise was more pronounced than expected in the survey for 2021 Q4. Banks also expect a slight rise in lending margins in Q2, while both funding costs and lending rates are expected to rise somewhat.
Chart 4
Banks’ operating environment, lending margins and lending rates. Non-financial enterprises
In its work on monitoring financial stability in Norway, Norges Bank uses extensive statistics on developments in credit and financial markets. In order to expand the information base, Norges Bank conducts a quarterly survey of bank lending. The survey provides information on changes in the demand for and supply of credit and on changes in banks’ loan terms and conditions. Objective of the Bank Lending Survey