Growth in lending to non-financial firms in the eurozone leaped last month, European Central Bank (ECB) data showed yesterday, as companies scramble for the resources to weather the COVID-19 crisis.
Lending to companies last month grew 5.4 percent, the ECB said in figures adjusted for some purely financial transactions, closing in on double the 3 percent rate of increase seen in February.
Meanwhile, growth in lending to households slowed slightly, from 3.7 percent in February to 3.4 percent last month, also in adjusted terms.
Loan growth across the private sector grew 5 percent, a jump from 3.7 percent in the previous month.
The lending data follow a quarterly survey of banks published by the ECB on Tuesday, which showed firms’ demand for credit “surged.”
“Firms’ emergency liquidity needs in the context of the coronavirus pandemic and the lockdown of large parts of the economy” had prompted the rush to secure loans, the Frankfurt institution said.
At the same time, demand for mortgages and consumer credit has slumped.
The 144 banks polled in the survey said that they expect demand for business loans to clamber still higher in the second quarter.
However, household demand for mortgages is expected to fall to levels “similar to the realized level in the second half of 2008,” after the collapse of Lehman Brothers Holdings Inc.
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