Monday, April 30, 2012

Fed: On net, Domestic Banks eased their lending standards and experienced stronger demand over the last 3 months

by Bill McBride on 4/30/2012 02:27:00 PM

From the Federal Reserve: The April 2012 Senior Loan Officer Opinion Survey on Bank Lending Practices

Overall, in the April survey, modest net fractions of domestic banks generally reported having eased their lending standards and having experienced stronger demand over the past three months. ... However, moderate to large net fractions of domestic banks eased many terms on C&I loans to firms of all sizes, with most indicating that they had done so in response to more aggressive competition from other banks or nonbank lenders. Domestic banks also reported an increase in demand from firms of all sizes.
...
Regarding loans to households, standards on prime residential mortgage loans and home equity lines of credit (HELOCs) were about unchanged. However, the April survey indicated a moderate strengthening in demand for prime residential mortgage loans. With respect to consumer loans, moderate net fractions of banks reported that they had eased standards on most types of these loans over the past three months. In addition, demand for all types of consumer loans increased somewhat, on net, with demand for auto loans showing the largest increase.
CRE Standards Click on graph for larger image.

Here are some charts from the Fed.

This graph shows the change in lending standards from the previous quarterly for commercial real estate (CRE). Lenders are now easing standards a little for CRE. A little easing doesn't mean standards are "loose", just not as tight as over the last several years.

CRE DemandThe second graph shows the change in demand for CRE loans.

Increasing demand and some easing in standards - this is another indicator suggesting the drag from non-residential investment will probably end mid-year.

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