Loan growth ‘modest’ for European banks
Lending to non-financial companies and consumers in the euro zone and UK will grow "modestly at best," in 2010, Fitch Ratings said in a report today.
Bank lending in the region dropped 1.9pc in the 12 months ended December 31, compared with the previous year, the rating company said. By comparison, the region’s economies are forecast to shrink by 4pc, Fitch said.
Banks are now pricing risk more carefully, demanding greater security from borrowers and becoming pickier about the companies they lend to, Fitch said.
“It would appear that loans are available only for the best credit risks and at a higher price,” Fitch said in the report.
“Given some of the lax underwriting standards and mis-pricing of credit that occurred in parts of the credit markets in the run-up to the crisis, such an adjustment is, at least in places, appropriate.”