Fed survey: Loan demand from large and medium-sized companies in the US strengthened in the second quarter

The US Federal Reserve (Fed) has released its second-quarter results regarding bank lending trends. According to the report, standards for commercial and industrial loans extended to businesses remained generally unchanged; however, a strengthening was observed in loan demand from large and medium-sized companies.

The responses of 56 domestic banks and 18 foreign bank branches operating in the US were evaluated as part of the Fed's "Senior Loan Officer Opinion Survey." The survey indicated that lending standards for commercial and industrial loans to large, medium, and small-sized businesses remained generally the same in the second quarter of the year.

In the report, banks stated that demand for commercial and industrial loans from large and medium-sized businesses increased, while demand from small-sized businesses remained largely unchanged. This outlook indicated that demand in the corporate credit market varied according to company size.

It was noted that lending standards for commercial real estate loans were eased in some categories. Conversely, it was stated that demand for commercial real estate loans remained generally stable.

DIFFERENT OUTLOOK IN CONSUMER LOANS

A more complex picture emerged regarding loans extended to households. The report stated that mortgage lending standards showed a mixed outlook, while demand for mortgage loans generally weakened.

It was noted that standards for credit card loans were tightened, yet demand remained largely unchanged. It was reported that lending standards for auto and other consumer loans remained generally stable.

According to the survey, while demand for auto loans weakened, demand for other consumer loans remained unchanged. The results showed that while there was relatively stronger demand on the business side in the US credit market, there was a weaker trend in household loans, particularly in the housing and auto sectors.