Corporate, SME loans to take brunt of Covid shock, say EU banks

Though credit outlook has darkened, banks expect to increase lending overall

More than half the respondents to the European Banking Authority’s latest risk survey say loans to small and medium-sized enterprises are likely to sour over the coming year. But they also expect to increase lending to this sector.

Out of 50 banks polled, 58% expect SME loans to deteriorate, and 52% that these portfolios will grow over the next 12 months. Fifty per cent also predict corporate loans will degrade, with 56% saying they’re likely to see these books increase.

Outlooks on the