Frontpage News 2014 Danish companies’ ...

Danish companies’ way to bank loans is easier

8 July 2014

The Danish banks have eased the credit policy in the second quarter and are expected to ease further in the coming quarter.

​The Danish Central Bank's current lending survey shows that Danish com-panies find it easier to get a loan in the bank. According to the Danish Bankers Association’s Chief Economist, Niels Storm Stenbæk, the development reflects especially two key conditions.
 
"The new figures from the central bank are above all a sign that the banks' write-downs on commercial customers fall and that the economy shows better times. In general, the companies are in a better position when they go to the bank," explains Niels Storm Stenbæk.
 
"In addition, the modifications are due to the fierce competition for good corporate clients. Along with low interest rates, competition contributes to lower prices," he says.

Basis for more loans

The banks have, during the crisis, gone through a significant capitalisation. This has resulted in excess liquidity that banks will now activate for the benefit of healthy growth. 
 
"The country's companies are generally at a better state. Initially, many of the companies finance their investments through their own savings. It may delay a recovery in the credit demand," concludes Niels Storm Stenbæk.

Figure 1. Change in banks' credit standards for corporate loans
 
 
 
 
Source: The Central Bank of Denmark’s lending survey.
Note: The net figure is the banks' assessment of the changes from quarter to quarter. When the net figure is 0, it means that the banks have not changed their credit standards, while a negative (positive) figure indicates that the banks have tightened (eased) in that quarter.
 
 
Figure 2. Factors affecting credit standards
 
 
 
 
 
Source: The Central Bank of Denmark’s lending survey.
Note: The net figure is the banks' assessment of changes from quarter to quarter. When the net figure is 0, it means that the banks have not changed their credit standards, while a negative (positive) sign indicates that the banks have tightened (eased) in that quarter.
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