Credit demand and supply slows across Italian regions

In the second half of 2025, the increase in corporate loan demand observed in the first six months of the year ceased across all Italian regions.

This weakening was primarily driven by reduced credit needs for investments, particularly noticeable for firms in the Center and South, and for construction companies in the North.

Credit supply policies for businesses remained largely unchanged and cautious throughout the country.

Intermediaries continued to be influenced by an increased perception of risk, which was only partially offset by greater competitive pressure.

Conditions tightened slightly for construction firms, especially in the Center and South, with a subtle easing on quantities and average loan spreads, but a tightening on collateral requirements and minimum rating levels for riskier financing.

Household mortgage demand showed a mixed trend in the second half of 2025, rising in the North East but stabilizing in other Italian macro-regions.

In contrast, consumer credit demand ceased its expansion across all areas.

Mortgage supply policies remained unchanged after a slight tightening in the first half of the year, though lenders reported tighter spreads for riskier mortgages due to elevated risk perception.

Consumer credit supply remained cautious.

The average duration of new mortgages increased to just under 25 years in 2025.

The loan-to-value ratio at origination stayed stable near 70 percent, but the share of new mortgages with an LTV exceeding 80 percent rose to 21.4 percent.