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Euro zone bank lending slowed in March: ECB

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Euro zone bank lending slowed in March: ECB
FILE PHOTO: A businessman walks on the esplanade of La Defense, in the financial and business district in La Defense, west of Paris, April 10, 2014. REUTERS/Gonzalo Fuentes/File Photo   -   Copyright  Gonzalo Fuentes(Reuters)
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FRANKFURT (Reuters) – Corporate and household lending growth in the euro zone slowed last month, European Central Bank data showed on Monday, a potential sign that banks are restricting credit amid the bloc’s economic slowdown.

Corporate lending growth slowed to 3.5 percent in March from 3.8 percent in February, well below its post-crisis peak of 4.3 percent hit in September.

With economic growth slowing sharply on weak export demand for manufactured goods, the ECB has already put plans to normalise policy on hold, announcing instead further stimulus measures to aid bank lending and prop up a still limping economy.

Fearing that banks will shut the flow of credit to firms amid a slowdown, the ECB said it would give lenders a new line of ultra cheap loans with the ultimate aim of getting cash to firms so they continue to invest.

Credit growth to households meanwhile slowed to 3.2 percent in March from 3.3 percent a month earlier, the ECB data showed.

Still, the annual growth rate of the M3 measure of money supply, which often foreshadows future activity, unexpectedly rose to 4.5 percent from 4.3 percent a month earlier, beating gloomier forecasts for 4.2 percent.

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(Reporting by Balazs Koranyi; Editing by Francesco Canepa)

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