July 14, 2014 / 4:12 PM / in 3 years

Chile corporate loan conditions tighten - central bank poll

SANTIAGO, July 14 (Reuters) - A growing number of banks reported that conditions for corporate loans in Chile became more restrictive in the second quarter, the central bank’s quarterly poll on bank credit showed on Monday.

Chile’s economy, which is largely fueled by copper exports and domestic consumption, was slowing gradually as investment cooled, manufacturing faltered and once-robust retail spending ebbed.

Credit supply conditions for big companies became more restrictive in the second quarter, according to 29 percent of banks polled, the central bank said. Availability for small and medium companies was also seen as more restrictive, according to 36 percent of banks, up from 14 percent in the first quarter.

Demand for credit was also perceived to be weaker in the quarter, both for big companies as well as for small or medium-sized ones.

Real estate and construction companies suffered the sharpest hardening in credit conditions, according to the central bank, as a building boom appeared to lose dynamism.

Demand for housing credit, however, was still perceived to have strengthened, the central bank added.

Santander Chile and Banco de Chile are the Andean country’s largest banks. (Reporting by Felipe Iturrieta; Editing by Jeffrey Benkoe)

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