European banks report easier lending

Banks in the 19-nation eurozone reported easing access to credit between July and September, European Central Bank data showed Tuesday as it nears the end of a massive economic stimulus programme.

Lenders reported easing credit standards -- the criteria they use to decide whether to issue a loan -- for businesses and household mortgages compared with the previous three months, while leaving them "broadly unchanged" for consumers, the ECB said in a statement.

There was a similar picture of easier loan conditions -- the actual terms of repayment -- for both firms and mortgage borrowers.

Meanwhile banks squeezed their margins as they chased business in an environment of continuing growth in demand for credit.

Low interest rates encouraged both companies and households to borrow more, with firms using the cash for activities such as capital investment or mergers, while high confidence led ordinary people to consume more or to bet on a good outlook for the housing market.

The buoyant credit market data appears as the ECB nears the end of a 2.5-trillion-euro ($2.9 trillion) mass bond-buying or "quantitative easing" (QE) scheme, slated for December.

Since 2015, monthly purchases of billions of euros of government and corporate bonds have helped pump cash into the financial system and then into the economy, stoking growth and powering inflation towards the ECB's target of just below 2.0 percent.

Banks said that the scheme had supported the easier credit conditions and terms of repayment they reported, while weighing on profitability -- a similar impact to the ECB's historic low interest rates.

Looking ahead, lenders see conditions staying the same for businesses and easing further for mortgage and consumer lending in the final quarter, according to the survey of 147 eurozone institutions.