August 4, 2014 / 10:17 AM / 3 years ago

Polish banks see higher demand for corporate loans: survey

WARSAW, Aug 4 (Reuters) - Polish banks expect demand for corporate loans to rise in the third quarter, in particular for long-term loans from large enterprises, a survey compiled by Poland’s central bank (NBP) showed on Monday.

The survey of senior loan officers also showed that banks were slightly easing standards for granting corporate loans, especially for small and medium-sized companies.

The survey was conducted at the turn of June and July, before EU’s latest round of sanctions against Russia, which raised fears that trade restrictions could hurt Polish businesses.

“The easing of lending policy towards enterprises was largely driven by a significant improvement in banks’ expectations of future developments in the economy,” the central bank said.

Growth in the Polish economy, the largest in central and eastern Europe, is expected by economists to slow in the second and third quarter, partly because of the impact of the Russia-Ukraine crisis.

The central bank’s rate-setting panel is expected to discuss whether to cut rates at its next sitting on Sept. 3, with credit conditions playing a role to its decision. Central bank Governor Marek Belka said in July that a September rate cut was unlikely.

The NBP said the survey showed banks thought that borrowers and industries they had considered the most risky were now less so.

“The growth in demand - besides higher financing needs for inventories and working capital - was, to a large extent, associated with the investment needs of enterprises and a delivery of business development plans,” NBP added.

Banks were also expecting a rise in demand for housing and consumer loans, although responses in these categories varied.

Data from Poland’s financial watchdog KNF show that total corporate credit extended by banks rose by an annual 5.8 percent in May, with credit for large companies rising by 10.5 percent. Housing credit growth slowed to 3.3 percent in May.

Total corporate credit was rising by about 20 percent at the turn of 2011 and 2012, but had slowed to about 2 percent at the end of 2013. (Reporting by Marcin Goettig; Editing by Ruth Pitchford)

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