German banks tighten corporate credit as loan demand falls

The net share tightening corporate credit standards was +6 percent, after +10 percent in Q2; tightening exceeded July plans.

Housing standards eased to −4 percent from +7 percent, as planned.

Consumer and other lending standards stayed unchanged at 0 percent, after +11 percent, despite planned tightening.

Banks cited corporate and sector risks, weak activity and the economic outlook.

Competition and greater risk tolerance eased pressure; corporate risk tolerance rose for the first time in over two years.

Household creditworthiness offset greater risk tolerance.

Poor loan quality constrained corporate lending.

Higher rates tightened corporate and consumer contract terms; riskier corporate margins widened.

Housing terms were unchanged.

Corporate demand fell for the first time in over two years, contrary to forecasts, mainly among smaller firms and for long-term loans.

Only inventories and working capital supported demand.

Housing demand fell sharply for a second quarter; consumer demand declined less.

Higher rates and weaker confidence weighed on households.

Rejections rose across all segments.

For Q4 2026, banks plan slight corporate and consumer tightening and unchanged housing standards; they forecast rising corporate but falling household demand.

Deposit, money-market and bond funding access worsened.