By Stelios Orphanides
Demand for credit is expected to increase further in the third quarter of the year after rising in April to June as Cypriot banks stick to their tight standards, the Central Bank of Cyprus said.
Demand for new corporate credit, which rose in the second quarter, is expected to rise in July to September, the supervisory authority said in its quarterly bank lending survey. Demand for mortgages is also expected to rise in the third quarter, after it did so in the previous quarter, while demand for consumer credit, which remained unchanged in April to June, is also expected to rise.
Cypriot banks, plagued by their non-performing loans stock of roughly half their portfolio, kept their credit standards unchanged in the second quarter and are expected to do so in the current quarter, the central bank said.
In the euro area, where demand for new credit picked up in the second quarter and is expected to increase further in the third quarter, banks relaxed their credit standards in April to June and are expected to continue doing so in the third quarter, the central bank said.