European banks unexpectedly tighten access to credit for companies

BarcelonaEurozone banks slightly, albeit unexpectedly, increased restrictions on lending or credit lines to businesses during the third quarter of 2025, while keeping mortgage lending standards for individuals unchanged and slightly tightening conditions for access to consumer credit, according to the latest report.

This increase in credit access restrictions for businesses, although small (4% net percentage of entities), marks a change after the slight improvement in the previous quarter (-1%) and exceeded industry forecasts, which had anticipated that business lending standards would remain stable. It was also lower than the historical average since 2003 (8%), but higher than the historical average since 2014 (3%). "This was unexpected, as in the previous survey round, banks had expected lending standards to remain unchanged," the ECB notes, adding that perceived risks to the economic outlook contributed to a tightening of lending standards.

Banks also cited the current high level of geopolitical uncertainty and trade risks as reasons for discriminating between sectors or companies when granting new loans, with several banks reporting an intensification of monitoring and analysis.

By country

Among the four largest eurozone countries, banks in Germany reported a net tightening of lending standards for corporate lending, while banks in Italy, France, and Spain reported no change. The survey also reveals that the net tightening was broadly similar for loans to SMEs and large corporations, with net percentages of 3% and 4%, respectively.

On the other hand, banks reported that lending standards for loans to households for home purchases remained unchanged (0%), as well as a moderate net tightening (5%) for consumer credit and other household loans. In this regard, the ECB notes that the slight net easing of lending standards for mortgage lending expected by eurozone banks in the previous quarter "failed to materialize," while the tightening of lending standards for consumer credit remained broadly in line with expectations. In this regard, banks' risk perception was the main factor driving the net tightening of consumer credit.

Looking ahead to the fourth quarter of 2025, banks expect lending standards to remain virtually unchanged for businesses, tighten slightly for mortgage loans, and tighten further for consumer credit.