Tabs

Monday, November 7, 2016

CRE Lending Standards Tighten, C&I Standards Unchanged

Over the past three months, banks reported that lending standards for C&I loans were largely unchanged while standards for CRE loans tightened, according to the Federal Reserve’s October 2016 Senior Loan Officer Opinion Survey on Bank Lending Practices. The survey results also indicated lower demand for C&I loans from large and middle-market firms, while demand from small firms was little changed. In contrast, demand for construction and development loans (a subset of CRE) increased on net.

Although most bank standards remained unchanged, a net 1.5% of banks surveyed reported tightening standards for C&I lending to large and middle-market firms, while a net 1.5% of those surveyed reported easing lending standards to small firms.

Most respondents who tightened standards reported a less favorable or more uncertain outlook, worsening of industry-specific problems, less aggressive competition from other banks or nonbank lenders, and reduced tolerance for risk.

Regarding household loans, lending standards for all types of residential real estate mortgages were little changed on balance, with the exception of GSE-eligible loans, for which a moderate net fraction of banks reported easing standards.

Read the survey release.
Visit Banks and the Economy.

No comments:

Post a Comment

Please read our comment policy before making a comment.