A survey on lending from the Central Bank shows that loan demand from both consumers and businesses continued to decline in the last three months of last year.
The Central Bank's bank lending survey reveals that for the third quarter in a row, credit standards on loans to enterprises were unchanged. The bank added, however, that heightened levels of risk perception and in particular diminished prospects for economic activity were reported.
The bank said that demand for loans from businesses fell due to a reduction in the financing needs of enterprises, rather than a change in the firms' external funding patterns. Lower levels of mergers and acquisitions was also noted.
On household lending, the Central Bank said that credit standards tightened on loans for mortgages due to weaker prospects for the housing market and ''less favourable expectations regarding economic activity''. Credit standards were unchanged in respect of consumer lending.
The bank said that during the first quarter of 2012, the recent pattern of unchanged credit standards and decreasing loan demand is set to continue.
Meanwhile, it has been revealed that up to 6,000 credit card accounts are being cancelled every month.
