New lending business in Germany on upward but rocky path

Frankfurt am Main (ots) -

- 1.0% increase of new business loans in the third quarter
- KfW Research expects more growth in the final quarter but is
only cautiously optimistic for the coming year
- Limited by continuing low level of investment confidence

The new lending business of German banks and savings banks with
companies and the self-employed returned to growth in the third
quarter of 2016 for the first time since spring 2015. It climbed by
1.0% year-on-year, as shown in the current KfW Credit Market Outlook.
KfW Research expects more growth in the new lending business in the
final quarter but is only cautiously optimistic with regard to the
development in the coming year. The general level of willingness to
invest of companies, which is closely linked to the loan demand,
continues to be relatively weak. This is likely to dampen credit
market dynamics in 2017.

The upturn in the new lending business with companies and the
self-employed this summer came as a surprise, as it took place in the
months after the Brexit decision. The companies had only temporarily
put their lending activities on hold. After the dust of the
referendum had settled in July, bank lending picked up again, and the
new lending business even increased overall in the quarter compared
to the prior-year period. New long-term loans were especially sought
after, most of them for capex financing purposes. This could be an
indication of corporate investment picking up again slightly towards
the end of the year after two weak quarters.

"The increase in the corporate new lending business is good news,
but we mustn't read too much into it," Dr Jörg Zeuner, Chief
Economist of KfW Group, comments. "While the positive conditions on
the credit market and the robust German economy give the market an
additional boost, companies' willingness to invest continues to be
rather low. Given the increase in political uncertainty on both sides
of the Atlantic Ocean, I don't expect a substantial trend reversal
for investments in the coming year either. The path of the new
lending business is therefore upward, but still likely to be rocky."

KfW Research calculates its Credit Market Outlook exclusively for
the Handelsblatt newspaper. The current edition is available at
www.kfw.de/kreditmarktausblick.

Pressekontakt:
KfW, Palmengartenstr. 5 - 9, 60325 Frankfurt
Kommunikation (KOM) Wolfram Schweickhardt
Tel. +49 (0)69 7431 1778, Fax: +49 (0)69 7431 3266,
E-Mail: Wolfram.Schweickhardt@kfw.de, Internet: www.kfw.de

Original-Content von: KfW, übermittelt durch news aktuell