Broadly unchanged credit demand and credit standards
- Survey of Bank Lending
Household and corporate credit demand was broadly unchanged in 2023 Q2. Banks expect slightly lower demand from households and commercial real estate (CRE) firms in Q3. Overall credit standards were approximately unchanged in Q2, and banks expect the same in Q3. Banks reported a slight increase in the use of interest-only periods on loans to households, slightly lower lending margins on residential mortgages and broadly unchanged lending margins on corporate loans.
Overall, banks reported that residential mortgage demand was broadly unchanged in Q2 compared with Q1 (Chart 1). Banks expect demand to edge lower in Q3. Demand for fixed-rate loans was broadly unchanged in Q2, while demand for first-home mortgages fell slightly. Banks expect the same for Q3. The use of interest-only periods increased slightly in Q2, and banks also expect a slight increase in Q3.
Credit standards for households were approximately unchanged in Q2, and banks expect no change in Q3 (Chart 1). Banks reported that the economic outlook contributed in isolation to slightly tighter credit standards in Q2, and they expect the same for Q3.
Banks as a whole reported higher funding costs and mortgage rates in Q2, but slightly lower lending margins (Charts 1 and 2). For Q3, banks also expect some increase in funding costs and lending rates, and lending margins are expected to remain approximately unchanged.
For non-financial corporates, banks as a whole reported unchanged credit demand in Q2 (Chart 3) and they expect broadly unchanged demand in Q3. Credit line utilisation and demand for fixed-rate loans were also approximately unchanged in Q2, and banks expect the same for Q3. Demand for commercial real estate (CRE) loans was broadly unchanged in Q2, but banks expect slightly lower demand in Q3.
Overall, banks reported unchanged credit standards for non-financial corporates in Q2 and expect credit standards overall to also remain unchanged in Q3. For CRE firms, banks reported a further slight tightening of credit standards in Q2 and that both economic and sector-specific outlooks were contributing factors.
Overall, banks reported higher funding costs and corporate lending rates in Q2, but broadly unchanged lending margins (Charts 3 and 4). For Q3, banks expect somewhat higher lending rates but approximately unchanged lending margins and funding costs.
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