January 14, 2020 5:15 pm

KfW: German companies’ demand for loans is slowing down

Banks grant significantly fewer loans in the third quarter of 2019.

According to KfW, the issuing of corporate loans in Germany has clearly lost momentum. In the third quarter of 2019, new business at banks and Sparkassen rose by 4.6 percent – compared with seven percent in Q2. A meagre economic dynamic, recession in industry and the many and varied political uncertainties have dampened the appetite for new loans among both banks and companies despite low interest rates, as KfW chief economist Fritzi Köhler-Geib suspects. KfW expects the demand for credit to continue to weaken in the fourth quarter and in 2020. Banks and Sparkassen had recently been able to compensate for the record low interest rates by expanding their lending business. Reuters

This post was written by Jens Secker

(Image rights: istockphoto.com/kontrast-fotodesign)

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