Chile credit supply squeezed, demand slackens -central bank poll
July 11 |
July 11 (Reuters) - Chilean credit supply conditions were squeezed and demand for most types of loans slackened during the second quarter, as a dour economic outlook looms, the central bank's quarterly poll on credit market conditions showed on Wednesday.
Over a fourth of banks polled by the monetary authority said credit supply conditions had become more restrictive for corporate, consumer and mortgage l o ans. None of the banks polled reported more favorable credit supply conditions.
"This trend of greater restrictions is related to a possible increase in the risk of debtors not paying amid a more complex economic scenario, and the perception of less competition in the sector," said the central bank.
Economic growth and domestic demand in world No. 1 copper producer Chile have gradually eased this year on fallout from the euro zone financial crisis and weakening global demand, especially from top trade partner and premier metals consumer China.
The government of Chilean President Sebastian Pinera on Monday lowered its forecast for economic growth this year to 4.7 percent from 5.0 percent due to weakening global demand.
A fifth of banks polled said demand for consumer loans had weakened, but 13 percent saw more favorable demand conditions.
"So a net of 7 percent of banks believes that demand conditions for consumer loans are weaker, which marks a difference with the eight preceding quarters during which demand conditions were seen stronger," the monetary authority said.
"Less attractive interest rate conditions" for these types of loans likely impacted demand conditions, the bank added.
Bucking the trend, 42 percent of banks polled saw stronger demand for mortgage loans.
"Among the reasons for this, are stable conditions for attractive interest rates for these types of loans, which has boosted demand for new loans and refinancing," said the central bank.
Demand for corporate loans among large companies has increased, according to 39 percent of banks polled, and demand among small and medium-sized companies also grew, 29 percent of those asked said.
An overall increase in demand for corporate loans is "due mainly to an increase in working capital and fixed-income investment needs," the bank said.
Chile's two largest banks are Santander Chile and Banco de Chile. (Reporting by Anthony Esposito; editing by M.D. Golan)
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