Senior Loan Officer Opinion Survey on Bank Lending Practices

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Senior Loan Officer Opinion Survey on Bank Lending Practices at Selected Branches and Agencies of Foreign Banks in the United States1

(Status of policy as of October 2017)

 

 

Questions 1-6 ask about commercial and industrial (C&I) loans at your bank. Questions 1-3 deal with changes in your bank's lending policies over the past three months. Questions 4-5 deal with changes in demand for C&I loans over the past three months. Question 6 asks about changes in prospective demand for C&I loans at your bank, as indicated by the volume of recent inquiries about the availability of new credit lines or increases in existing lines. If your bank's lending policies have not changed over the past three months, please report them as unchanged even if the policies are either restrictive or accommodative relative to longer-term norms. If your bank's policies have tightened or eased over the past three months, please so report them regardless of how they stand relative to longer-term norms. Also, please report changes in enforcement of existing policies as changes in policies.

 

1. Over the past three months, how have your bank's credit standards for approving applications for C&I loans or credit lines—other than those to be used to finance mergers and acquisitions—changed?

  All Respondents
Banks Percent
Tightened considerably 0 0.0
Tightened somewhat 0 0.0
Remained basically unchanged 21 91.3
Eased somewhat 2 8.7
Eased considerably 0 0.0
Total 23 100.0

 

2. For applications for C&I loans or credit lines—other than those to be used to finance mergers and acquisitions—that your bank currently is willing to approve, how have the terms of those loans changed over the past three months?

 

a. Maximum size of credit lines

  All Respondents
Banks Percent
Tightened considerably 1 4.3
Tightened somewhat 0 0.0
Remained basically unchanged 21 91.3
Eased somewhat 1 4.3
Eased considerably 0 0.0
Total 23 100.0

 

b. Maximum maturity of loans or credit lines

  All Respondents
Banks Percent
Tightened considerably 0 0.0
Tightened somewhat 0 0.0
Remained basically unchanged 23 100.00
Eased somewhat 0 0.0
Eased considerably 0 0.0
Total 23 100.0

 

c. Costs of credit lines

  All Respondents
Banks Percent
Tightened considerably 0 0.0
Tightened somewhat 0 0.0
Remained basically unchanged 19 82.6
Eased somewhat 4 17.4
Eased considerably 0 0.0
Total 23 100.0

 

d. Spreads of loan rates over your bank's cost of funds (wider spreads=tightened, narrower spreads=eased)

  All Respondents
Banks Percent
Tightened considerably 0 0.0
Tightened somewhat 0 0.0
Remained basically unchanged 19 82.6
Eased somewhat 4 17.4
Eased considerably 0 0.0
Total 23 100.0

 

e. Premiums charged on riskier loans

  All Respondents
Banks Percent
Tightened considerably 0 0.0
Tightened somewhat 0 0.0
Remained basically unchanged 20 87.0
Eased somewhat 3 13.0
Eased considerably 0 0.0
Total 23 100.0

 

f. Loan covenants

  All Respondents
Banks Percent
Tightened considerably 0 0.0
Tightened somewhat 0 0.0
Remained basically unchanged 21 91.3
Eased somewhat 2 8.7
Eased considerably 0 0.0
Total 23 100.0

 

g. Collateralization requirements

  All Respondents
Banks Percent
Tightened considerably 0 0.0
Tightened somewhat 0 0.0
Remained basically unchanged 22 100.0
Eased somewhat 0 0.0
Eased considerably 0 0.0
Total 22 100.0

 

h. Use of interest rate floors (more use=tightened, less use=eased)

  All Respondents
Banks Percent
Tightened considerably 0 0.0
Tightened somewhat 0 0.0
Remained basically unchanged 19 90.5
Eased somewhat 2 9.5
Eased considerably 0 0.0
Total 21 100.0

 

 

3. If your bank has tightened or eased its credit standards or its terms for C&I loans or credit lines over the past three months (as described in questions 1 and 2), how important have been the following possible reasons for the change? (Please respond to either A, B, or both as appropriate.)

A. Possible reasons for tightening credit standards or loan terms:

a. Deterioration in your bank's current or expected capital position

 

Responses are not reported when the number of respondents is 3 or fewer.

 

b. Less favorable or more uncertain economic outlook

 

Responses are not reported when the number of respondents is 3 or fewer.

 

c. Worsening of industry-specific problems (please specify industries)

 

Responses are not reported when the number of respondents is 3 or fewer.

 

d. Less aggressive competition from other banks or nonbank lenders (other financial intermediaries or the capital markets)

 

Responses are not reported when the number of respondents is 3 or fewer.

 

e. Reduced tolerance for risk

 

Responses are not reported when the number of respondents is 3 or fewer.

 

f. Decreased liquidity in the secondary market for these loans

 

Responses are not reported when the number of respondents is 3 or fewer.

 

g. Deterioration in your bank's current or expected liquidity position

 

Responses are not reported when the number of respondents is 3 or fewer.

 

h. Increased concerns about the effects of legislative changes, supervisory actions, or accounting standards

 

Responses are not reported when the number of respondents is 3 or fewer.

 

 

B. Possible reasons for easing credit standards or loan terms:

a. Improvement in your bank's current or expected capital position

  All Respondents
Banks Percent
Not important 6 100.0
Somewhat important 0 0.0
Very important 0 0.0
Total 6 100.0

b. More favorable or less uncertain economic outlook

  All Respondents
Banks Percent
Not important 3 50.0
Somewhat important 3 50.0
Very important 0 0.0
Total 6 100.0

c. Improvement in industry-specific problems (please specify industries)

  All Respondents
Banks Percent
Not important 4 66.7
Somewhat important 2 33.3
Very important 0 0.0
Total 6 100.0

d. More aggressive competition from other banks or nonbank lenders (other financial intermediaries or the capital markets)

  All Respondents
Banks Percent
Not important 1 16.7
Somewhat important 2 33.3
Very important 3 50.0
Total 6 100.0

e. Increased tolerance for risk

  All Respondents
Banks Percent
Not important 4 66.7
Somewhat important 2 33.3
Very important 0 0.0
Total 6 100.0

f. Increased liquidity in the secondary market for these loans

  All Respondents
Banks Percent
Not important 2 33.3
Somewhat important 3 50.0
Very important 1 16.7
Total 6 100.0

g. Improvement in your bank's current or expected liquidity position

  All Respondents
Banks Percent
Not important 4 80.0
Somewhat important 1 20.0
Very important 0 0.0
Total 5 100.0

h. Reduced concerns about the effects of legislative changes, supervisory actions, or accounting standards

  All Respondents
Banks Percent
Not important 4 66.7
Somewhat important 2 33.3
Very important 0 0.0
Total 6 100.0

 

4. Apart from normal seasonal variation, how has demand for C&I loans changed over the past three months? (Please consider only funds actually disbursed as opposed to requests for new or increased lines of credit.)

  All Respondents
Banks Percent
Substantially stronger 0 0.0
Moderately stronger 4 17.4
About the same 15 65.2
Moderately weaker 4 17.4
Substantially weaker 0 0.0
Total 23 100.0

 

 

5. If demand for C&I loans has strengthened or weakened over the past three months (as described in question 4), how important have been the following possible reasons for the change? (Please respond to either A, B, or both as appropriate.)

A. If stronger loan demand (answer 1 or 2 to question 4), possible reasons:

a. Customer inventory financing needs increased

 

Responses are not reported when the number of respondents is 3 or fewer.

 

b. Customer accounts receivable financing needs increased

 

Responses are not reported when the number of respondents is 3 or fewer.

 

c. Customer investment in plant or equipment increased

 

Responses are not reported when the number of respondents is 3 or fewer.

 

d. Customer internally generated funds decreased

 

Responses are not reported when the number of respondents is 3 or fewer.

 

e. Customer merger or acquisition financing needs increased

 

Responses are not reported when the number of respondents is 3 or fewer.

 

f. Customer borrowing shifted to your bank from other bank or nonbank sources because these other sources became less attractive

 

Responses are not reported when the number of respondents is 3 or fewer.

 

g. Customer precautionary demand for cash and liquidity increased

 

Responses are not reported when the number of respondents is 3 or fewer.

 

 

B. If weaker loan demand (answer 4 or 5 to question 4), possible reasons:

a. Customer inventory financing needs decreased

  All Respondents
Banks Percent
Not important 4 100.0
Somewhat important 0 0.0
Very important 0 0.0
Total 4 100.0

b. Customer accounts receivable financing needs decreased

  All Respondents
Banks Percent
Not important 4 100.0
Somewhat important 0 0.0
Very important 0 0.0
Total 4 100.0

c. Customer investment in plant or equipment decreased

  All Respondents
Banks Percent
Not important 3 75.0
Somewhat important 1 25.0
Very important 0 0.0
Total 4 100.0

d. Customer internally generated funds increased

  All Respondents
Banks Percent
Not important 4 100.0
Somewhat important 0 0.0
Very important 0 0.0
Total 4 100.0

e. Customer merger or acquisition financing needs decreased

  All Respondents
Banks Percent
Not important 0 0.0
Somewhat important 3 75.0
Very important 1 25.0
Total 4 100.0

f. Customer borrowing shifted from your bank to other bank or nonbank sources because these other sources became more attractive

  All Respondents
Banks Percent
Not important 3 75.0
Somewhat important 1 25.0
Very important 0 0.0
Total 4 100.0

g. Customer precautionary demand for cash and liquidity decreased

  All Respondents
Banks Percent
Not important 4 100.0
Somewhat important 0 0.0
Very important 0 0.0
Total 4 100.0

 

 

6. At your bank, apart from seasonal variation, how has the number of inquiries from potential business borrowers regarding the availability and terms of new credit lines or increases in existing lines changed over the past three months? (Please consider only inquiries for additional or increased C&I lines as opposed to the refinancing of existing loans.)

  All Respondents
Banks Percent
The number of inquiries has increased substantially 0 0.0
The number of inquiries has increased moderately 5 21.7
The number of inquiries has stayed about the same 18 78.3
The number of inquiries has decreased moderately 0 0.0
The number of inquiries has decreased substantially 0 0.0
Total 23 100.0

 

 

Questions 7-8 ask about commercial real estate (CRE) loans at your bank, including construction and land development loans and loans secured by nonfarm nonresidential properties. Question 7 deals with changes in your bank's standards over the past three months. Question 8 deals with changes in demand. If your bank's lending standards or terms have not changed over the relevant period, please report them as unchanged even if they are either restrictive or accommodative relative to longer-term norms. If your bank's standards or terms have tightened or eased over the relevant period, please so report them regardless of how they stand relative to longer-term norms. Also, please report changes in enforcement of existing standards as changes in standards.

 

 

7. Over the past three months, how have your bank's credit standards for approving applications for CRE loans changed?

  All Respondents
Banks Percent
Tightened considerably 0 0.0
Tightened somewhat 2 13.3
Remained basically unchanged 13 86.7
Eased somewhat 0 0
Eased considerably 0 0.0
Total 15 100.0

 

 

8. Apart from normal seasonal variation, how has demand for CRE loans changed over the past three months? (Please consider the number of requests for new spot loans, for disbursement of funds under existing loan commitments, and for new or increased credit lines.)

  All Respondents
Banks Percent
Substantially stronger 0 0.0
Moderately stronger 3 20.0
About the same 11 73.3
Moderately weaker 1 6.7
Substantially weaker 0 0.0
Total 15 100.0

1. As of June 30, 2017, the 23 respondents had combined assets of $1.3 trillion, compared to $2.4 trillion for all foreign-related banking institutions in the United States. The sample is selected from among the largest foreign-related banking institutions in those Federal Reserve Districts where such institutions are common. Return to text

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Last Update: November 6, 2017