Eurozone bank lending to businesses picks up … MARKETWATCH
Eurozone bank lending to businesses picks up
FRANKFURT–The recovery in eurozone bank lending continued in May, a trend which should underpin corporate investments in the region.
The European Central Bank said Wednesday that lending to non-financial corporations grew at an annual rate of 3.6% in May, which marks the highest rate since May 2009.
By comparison, bank lending to businesses grew at an annual rate of 3.3% in April.
The eurozone economy is heavily dependent on the availability of funding, and economists watch lending data as an indicator of economic health.
Lending to eurozone households was robust, too. Lending in the sector grew at an annual rate of 2.9% in May, the same rate as in April, according to the ECB.
But despite a noticeable recovery in bank lending from the 2014 trough, lending rates have remained well below pre-crisis levels. In 2007 and in the first half of 2008, bank lending to businesses was running at
rates well above 12%.
The ECB’s key indicator of the money supply, meanwhile, picked up unexpectedly, with the annual growth rate of M3 rising to 4.0% from 3.8% in April. Economists polled by The Wall Street Journal had forecast 3.8%.