The terms of the offer show fewer restrictions in mortgages

BCCh Banking Credit Survey: Submission Requirements Show Less Restrictions on Mortgages

Friday, July 20, 2018

Online Economy and Enterprises

Future Value

According to the latest credit survey bank In the second quarter of 2018 the Central Bank of Chile, the terms of call for tenders show some less restrictions, especially in the granting of loans for housing. Meanwhile, demand is perceived as slightly stronger in the consumer, corporate and real estate sectors.

OFFER

In the second quarter of 2018, banks report a lower restriction on the mortgage portfolio. Under the conditions of the offer of consumer credit, the proportion of banks reporting less demanding conditions increases to 17% for housing loans and the percentage of replies declaring more restrictive conditions increases (8%).

For the consumer segment, the fraction of banks with the most limited conditions (15%) is maintained. For the large business segment, there are no major changes in the terms of credit.

In the second quarter, the percentage of banks setting the least demanding conditions (13%) was maintained and the fraction of the entities reporting more restrictive standards (7% in the previous quarter).

For SMEs, the conditions remain somewhat restrictive, even if they are less deep. For this segment, the proportion of banks with the most restrictive conditions fell to 8% in the current quarter, compared to 23% in the previous period.

For real estate and construction companies, most institutions surveyed changes in its standards during the second quarter, while maintaining the conditions for granting credit.

DEMAND

The demand for household credit is perceived as somewhat stronger for the consumer segment and without major changes for the consumer. With regard to the consumer segment, the fraction of banks that consider that demand has strengthened over the period rose from 43% to 23% in the previous period and slightly increased the percentage of customers. Entities it signals a weakening of demand (from 0 to 8%).

Meanwhile, in housing loans, the proportion of banks that experienced weaker momentum during the quarter decreased to 8%, from 33% over the previous period

The demand for credit is seen as stronger for large companies and, to a lesser extent, for SMEs. For large companies and SMEs, the number of institutions that benefit from greater dynamism increases (by respectively 33% and 15%, to 44% and 31%), highlighting that a part banks consulted during this quarter consider that demand significantly strengthened in both segments (19% for large companies and 8% for SMEs).

By sector, for real estate companies, demand is seen as more dynamic.

In particular, the number of banks considering that demand has increased over the period, from 27 to 50% and that the fraction of banks with the least dynamism has remained stable (8%).

Finally, for construction firms, 7% of the banks surveyed perceive a slower demand during the quarter, a figure that coincides with that of those who perceive a significantly higher demand.