Eurozone firms are looking for more credit: ECB survey

27th January 2011, Comments 0 comments

Eurozone companies asked for more credit from banks late last year, the European Central Bank said Thursday, a sign that sustained growth prospects are encouraging firms to mull fresh investments.

Demand for corporate loans grew from both small- and medium-sized enterprises, and from large companies, the ECB said in its quarterly Bank Lending Survey of 120 eurozone lending institutions.

The banks themselves left credit standards unchanged in the fourth quarter of 2010, the survey found.

But "interestingly, for the first time in more than two years, financing needs for fixed investment purposes stopped dragging down demand for corporate loans," the ECB said.

Net demand, the difference between increases and decreases, for home purchases grew markedly meanwhile, with a net 23 percent of bank's polled reporting stronger interest from households for mortgages.

The figure was eight percent in the ECB's previous survey.

Net demand for consumer credit to buy big-ticket items like furniture, appliances and automobiles remained negative at minus two percent, but that was an improvement from minus eight percent in the third quarter the ECB said.

In December, the central bank forecast 2010 economic growth of 1.6 percent for the eurozone, followed by an expansion of 1.4 percent this year for the 17-nation area that includes Estonia since January 1.

© 2011 AFP

0 Comments To This Article