In the first quarter of this year, banks expect a significant tightening of lending policy and a significant decline in demand for loans in the housing loan segment. We reach such conclusions after analyzing the Good Finance of Poland survey addressed to the chairmen of credit committees.
As every quarter, the Good Finance of Poland questioned the chairmen of credit committees in order to determine the direction of changes in lending policy in three segments: corporate loans, housing loans and consumer loans. According to bankers’ declarations, the biggest changes await us in the housing segment.
The last quarter of 2015 was characterized by a significant tightening of criteria and a significant increase in loan spreads. According to banks, this was influenced by the recommendations of the Good Finance Supervision Authority regarding the assessment of creditworthiness, the withdrawal of the Bank Enforcement Order from the legal system and the risk related to the expected economic situation.
Some institutions also changed their business policy, placing less emphasis on the development of this part of the credit segment. Despite the tightening of lending policy, banks recorded an increase in demand. They are responsible for the amendment of the Flat for the Young program and changes in the scope of own contribution from January 2016.
In the opinion of the surveyed banks, in the first quarter of this year we must expect further tightening of lending policy and a decline in demand.
In the area of consumer loans, no significant changes in lending policy were noted in the last quarter of 2015. Loans margins were reduced at some banks, but non-interest loan costs increased. The reasons for the increase in e.g. commission are persistently low interest rates and changes in the method of determining the maximum amount of interest. In order to maintain the current profitability on consumer loans, banks were forced to increase non-interest costs.
The last quarter also saw a slight increase in demand for this type of loans and in the coming months the banks expect a further increase in demand. Also, easing of lending policy in some banks should be expected, which will be influenced by growing competitive pressure.
In the corporate loans segment, the criteria for large enterprises were tightened, but the scale of these changes was small. The criteria for granting loans to small and medium-sized enterprises have not changed. In the fourth quarter of 2015, the surveyed banks increased spreads on loans with higher risk, and non-interest loan costs also increased. The planned introduction of a bank tax and an increase in the ABC burden contributed to such lending policy. The expected economic situation was also an important factor.
In the first quarter of this year, banks expect demand to be maintained at their current level and plan a slight tightening of lending policy.