Santander Corporate & Investment : Rising interest rates continue to take their toll on bank lending in the eurozone, as shown by the ECB’s data on lending to the private sector in the eurozone published last week. It confirms the progressive slowdown in bank lending to +3.5% year-on-year in April vs. +4% in March and a peak of +6.5% in September last year, thus approaching its pre-pandemic levels of +3% (2018-19 average). This slower growth affects both corporate lending (-0.8pp m/m to +4.6% year-on-year in April) and household lending (-0.3pp m/m to +2.7% year-on-year).
By countries, the strongest growth in bank lending remains centred in the core countries (+4.9% in Germany and +5.1% in France), in contrast with declines of -0.2% in Italian lending and -1.2% in Spanish lending. Similarly, lending to companies is also significantly higher in Germany (+7.9%) and France (+6.6%) than in Italy (-1.5%) or Spain (-0.6%). The exception to this duality between core vs. peripheral countries is to be found in consumer credit, where the lowest growth rate is in German credit: +1%, in contrast to +4.8% in Italian credit, +2.6% in Spanish credit and +2.9% at European level.