The survey asks banks about demand for loans as well as lending criteria for corporations and households, asking the banks if they are likely to be stricter or more lax in the coming quarter.

Encouraging data from both enterprises and households show a change of scenery with an upturn in requests for loans in the third quarter of 2015.

Bankers appear optimistic that the fourth quarter will follow this upward trend, with more businesses making loan requests and more retail customers asking for housing and consumer loans.

After that, each credit institution’s balance sheet is expected to determine its ability to support the lending.

As regards bank criteria for business and consumer loans, these are expected to be more lax than housing loans.

Collateral agreements as security for repayment are stricter, but there is greater flexibility on all other conditions, mainly due to lower capital expenditure and balance sheet limitations.

On the other hand, fixed investment, inventories and working capital and debt restructuring have all contributed to the increase in client demand.

This is true for both Cyprus and other eurozone countries, which also expect an increase in housing loans demand for the last quarter of the year.

Source: InCyprus