Cyprus banks tighten lending criteria

Cypriot Banks have tightened the criteria for granting loans to businesses and households in the second quarter of 2010, in comparison with the first quarter of the year, according to the Bank Lending Survey, released by the Central Bank of Cyprus.
The survey indicates that the demand for loans from businesses during the second quarter of 2010 remained stable. The demand for housing loans by households also remained stable. At the same time demand for consumer loans by households fell by 10% over the previous quarter.
According to the banking institutions that participated in the survey, the third quarter of 2010 the criteria are expected to remain unchanged.

The survey notes that for the first time since early 2009, contrary to expectations, there were more stringent criteria for granting housing loans to households.
The criteria for consumer and other loans to households have also been restricted in the second quarter of 2010.
Regarding the demand for loans, the survey shows that demand for loans by enterprises, contrary to expectations for an increase, remained essentially unchanged compared to the previous quarter.
No change is expected for the third quarter of 2010 in the net demand for loans to businesses.
The net demand for housing loans by households recorded no significant change in the second quarter of 2010 while demand for consumer and other loans by households recorded a decrease (-10%).
The Bank Lending Survey is a qualitative survey of bank lending in the euro area.
The survey is based on a representative sample of euro area banks and covers a broad range of topics relating to loans to enterprises and households and is conducted on a quarterly basis and the national results are published by the Central Bank of Cyprus, soon after the publication of the euro area results by the European Central Bank.