March 7, 2014 / 11:12 AM / in 4 years

Finnish banks say loan demand falls at slower pace

HELSINKI, March 7 (Reuters) - Demand for corporate bank loans in Finland fell in the first three months of this year at a slower pace than the previous quarter, the Nordic country’s main banking association said on Friday.

Demand is expected to fall again in the next three months, The Federation of Finnish Financial Services said in its quarterly report.

The economy in Finland, one of the world’s few triple-A rated countries, is expected to make a modest recovery this year after shrinking 1.4 percent in 2013 as investments slumped and domestic demand fell.

The banking association said a net 4 percent of banks reported a fall in demand for loans from companies in the first quarter compared with the same period in 2013. That means 4 percent more banks saw demand falling than rising compared with a net 27 percent in the previous survey three months earlier.

A net 6 percent of banks expect demand for corporate loans to fall in the second quarter of this year, the survey showed.

The survey also showed that demand for loans from households fell faster than from companies, with more than a quarter of banks reporting lower demand in the beginning of the year a year earlier. Almost a third of banks expect households to ask for fewer loans in the second quarter.

The survey of 105 bank managers was conducted in late February. (Reporting by Sakari Suoninen; Editing by Erica Billingham)

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