The European Central Bank (ECB) reported a continued decline in bank loan demand in the first quarter of the year. Contrary to expectations, interest in corporate loans and home mortgages decreased once again, according to a regular survey conducted by the ECB. However, consumer loan demand remained largely stable.

Factors contributing to the decreased loan demand include high interest rates, reduced corporate investments, and a weaker consumer sentiment, as cited by the ECB. Banks anticipate a moderately weaker interest in corporate loans and a stronger demand for loans from private households in the second quarter.

The surveyed banks tightened their internal lending standards for both corporate and consumer loans in the first quarter, while loosening standards for real estate loans for the first time in over two years. Terms and conditions outlined in loan contracts varied: remaining stable for corporations, relaxed for home mortgages, and tightened for consumer loans.