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A survey of nine foreign banks and branches shows that in the third quarter, banks did not intend to change standards for lending to households, and one bank promised to tighten standards for lending to businesses, according to the LB report.
“The survey results show that several banks tightened credit standards and lent more cautiously due to increased uncertainty due to the pandemic, but the situation is significantly different from the previous financial crisis, during which all banks tightened credit standards quickly, “said the Bank of Lithuania’s Macroprudential Analysis Department. senior economist Paulina Zlatkutė.
According to her, changes in loan conditions were also observed in the second quarter: several banks reduced the size of loans or lines of credit, tightened collateral requirements and increased loan margins when granting loans to companies, while that mortgages also slightly tightened collateral requirements and other restrictions, but the margin did not increase.
In this survey, which was carried out in June, the financial situation of most companies had not yet been badly evaluated, only the evaluation of companies operating in hotels and restaurants had deteriorated significantly. Banks rated the companies with the least impact on the pandemic (agriculture, forestry, production) as the most favorable. In general, the condition of most of the companies was evaluated as good or average.
Most banks assessed the condition of households on average, but three banks believe it will deteriorate.
The survey shows that with the COVID-19 pandemic deteriorating the general economic situation, all banks have restricted loans to hotels and restaurants, more than half to real estate and transportation and a third to construction companies.
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