June 26, 2020 / 8:08 AM / 15 days ago

Euro zone bank lending continues to surge amid crisis, ECB says

FILE PHOTO: The European Central Bank (ECB) logo is pictured before a news conference on the outcome of the meeting of the Governing Council in Frankfurt, Germany, January 23, 2020. REUTERS/Ralph Orlowski

FRANKFURT (Reuters) - Lending to euro zone companies continued to surge in May as firms relied heavily on bank credit to stay afloat amid the continent’s coronavirus-related lockdown, data from the European Central Bank showed on Friday.

With millions of people in stuck at home and much of the bloc’s economy mothballed, activity came to a standstill in March and only started to remerge in May, forcing firms to find emergency cash to survive.

Lending growth to non-financial corporations accelerated to 7.3% in May from 6.6% a month earlier, its best rate since early 2009. Household lending growth meanwhile held steady at 3.0%.

Although banks initially appeared to tighten access to credit, a raft of government and central bank measures, from public guarantees to easier collateral rules, has supported lending.

Indeed, the ECB loaned 1.3 trillion euros to banks last week for at a rate as low at minus 1% provided banks at least maintain their stock of lending to the real economy.

The annual growth rate of the M3 measure of money supply accelerated to 8.9% from 8.2%, beating expectations for 8.6% in a Reuters poll.

Reporting by Balazs Koranyi; Editing by Francesco Canepa

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