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26 Feb 2015
Eurozone credit growth picking up – ING
FXStreet (Barcelona) - Teunis Brosens of ING, comments that with eurozone bank lending showing signs of life, the question arises if Draghi’s QE purchases are still needed…?
Key Quotes
“Growth in loans to households and businesses originated by banks (and adjusted for sales and securitisation) increased to 0.5%YoY in January, up from 0.2%YoY the month before. Loans to households (also adjusted) increased to 0.9%YoY. Loans to non-financial corporations are still contracting at -0.9%YoY (adjusted).”
“The pace of contraction is slowing, but it will probably take several more months before net lending to non-financial corporations turns positive again.”
“It is clear that the credit contraction in the Eurozone, which lasted for over two years, is ending. The pattern is the usual around economic turning points: lending to household has taken the lead by accelerating over the past few months, while lending to non-financial corporations is lagging the cycle.”
“M3-growth accelerated to 4.1%YoY in January, the highest rate in almost six years.”
“With oil prices still around $60 per barrel, headline inflation in the Eurozone looks set to remain negative until the Summer, and it may not reach 1.0% until the end of this year. At this stage we attach greater importance to the further pickup in growth of M1, to 9.0%YoY in January from 7.9% a month earlier.”
“With credit conditions gradually easing and a brightening outlook for economic growth in the Eurozone, some will wonder whether the ECB’s QE-purchases, due to start next week, is still needed. It is a question Draghi no doubt will be confronted with at next week’s Governing Council.”
Key Quotes
“Growth in loans to households and businesses originated by banks (and adjusted for sales and securitisation) increased to 0.5%YoY in January, up from 0.2%YoY the month before. Loans to households (also adjusted) increased to 0.9%YoY. Loans to non-financial corporations are still contracting at -0.9%YoY (adjusted).”
“The pace of contraction is slowing, but it will probably take several more months before net lending to non-financial corporations turns positive again.”
“It is clear that the credit contraction in the Eurozone, which lasted for over two years, is ending. The pattern is the usual around economic turning points: lending to household has taken the lead by accelerating over the past few months, while lending to non-financial corporations is lagging the cycle.”
“M3-growth accelerated to 4.1%YoY in January, the highest rate in almost six years.”
“With oil prices still around $60 per barrel, headline inflation in the Eurozone looks set to remain negative until the Summer, and it may not reach 1.0% until the end of this year. At this stage we attach greater importance to the further pickup in growth of M1, to 9.0%YoY in January from 7.9% a month earlier.”
“With credit conditions gradually easing and a brightening outlook for economic growth in the Eurozone, some will wonder whether the ECB’s QE-purchases, due to start next week, is still needed. It is a question Draghi no doubt will be confronted with at next week’s Governing Council.”