August 27, 2012
Corporate lending in Germany in Q2 expanded at its fastest pace in over three years. Loans outstanding rose by EUR 11 bn qoq and are now close to their late-2008 pre-crisis peak of EUR 1,205 bn, but still some way off their all-time high in 2001. Yoy growth has returned to a healthy 2.2%, but major differences remain between banking groups: large banks, Landesbanks and foreign banks continued to struggle to merely maintain current lending volumes, whereas loan growth by cooperative banks and savings banks accelerated even further. Since 2008, the latter two have expanded their combined market share by 5 pp to 42%, mainly at the expense of large banks and Landesbanks (combined share -4 pp to only 27%). Lending increased most in the chemical, utilities and agri sectors, but declined the most in the more cyclical metal, automotive and mechanical engineering industries – a sign of the anticipated economic slowdown.
With overall credit growth still rising, Germany is virtually alone among large EU countries. In most core euro countries, yoy growth is still positive but dwindling. In the Netherlands growth rates slumped from 11% to 3% during the past 12 months. In the peripheral economies, credit contraction is speeding up: growth rates deteriorated in Spain from -4% to -6% and in Italy from +5% to -2%. While currently this may mainly be driven by weak credit demand in a deepening recession, the risks are mounting of a credit crunch in some southern EU countries.
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