U.S. banks continue to ease lending standards and most terms on all major non-real estate loans during the past three months, the Federal Reserve reported in its quarterly survey of senior loan officers.
Some respondents also saw an increase in demand for commercial and industrial (C&I) and commercial real estate (CRE) loans over the same period, the Fed said.
At the same time, banks reportedly experienced, on net, slightly weaker demand for some categories of residential real estate loans, the Fed said.
With respect to consumer lending, the net percentages of banks that reported easing standards were low and roughly in line with the previous survey, the Fed said.
While some respondents saw an increase in demand for both credit card and auto loans over the past three months, the pickup in demand was not widespread, the Fed said.
Moreover, demand for other consumer loans was about unchanged, the Fed said.
Some domestic and foreign banks continued to report an increase in demand for C&I loans over the past three months, the Fed said.
But the number of domestic banks indicating an increase in demand for CRE loans in the current survey declined in comparison with the April survey, the Fed said.
Some banks indicated demand for both prime and nontraditional residential real estate loans as well as for home equity lines of credit had weakened or remained basically unchanged over the survey period, the Fed said.
In response to a special question, most banks indicated that they expected originations of residential real estate loans in the second half of 2011 to be about the same as in the first half of the year, the Fed said.
A significant number of respondents to another special question indicated that, for most loan categories, the current level of lending standards was tighter than the middle of its recent historical range, though the reported degrees of tightness varied noticeably across categories.
Domestic banks further eased standards on C&I loans to firms of all sizes over the past three months, the Fed said.
The number of banks that reported easing on loans to smaller firms remained relatively low and below the amount that reportedly eased for large and middle-market firms.
But on net, domestic and foreign banks indicated that they had eased most terms on C&I loans over the survey period, and the reported easing was especially pronounced for price-related terms, the Fed said.
As in the past several surveys, the most commonly cited reason for having eased standards or terms on C&I loans was increased competition from other lenders, the Fed said.
Domestic banks indicated that standards on both commercial and residential real estate loans were about unchanged over the past three months, the Fed said.
(Reporting by Doug Palmer; editing by Neil Stempleman and Diane Craft)