In a statement, the central bank said that, while 87% of banks reported unchanged credit standards for businesses in the second quarter of 2024, a net tightening for the July-September period was anticipated due to the deterioration of borrowers' profiles and the profitability and liquidity of banks' portfolios.
The survey revealed that 85.2% of banks expect to maintain their lending standards in the third quarter using the modal approach.
However, the diffusion index (DI) method — which considers the net proportion of banks tightening versus easing standards — indicates a likely tightening.
The survey revealed that household loan standards remained largely unchanged in the previous quarter 2024, with 84.2% of banks maintaining their current criteria.
For the current quarter, 81.6% of banks anticipate steady standards, though some expect a net easing due to improved profitability and a more favorable economic outlook.
Loan demand showed mixed results. Most banks reported unchanged demand for business loans, but the DI method reflected a net increase due to higher inventory and accounts receivable financing needs.
Household loan demand also increased, driven by attractive financing terms and higher consumption.
The anticipated tightening of credit standards highlights the cautious approach banks are taking amid ongoing economic uncertainties and market conditions, the central bank said.
