The German Bundesbank published its Bank Lending Survey (BLS) for the first quarter of 2026, indicating that German banks continued to tighten lending standards for corporate loans in line with prior plans and made lending terms more restrictive across all credit segments. Standards also tightened for consumer and other household credit, while mortgage lending standards were nearly unchanged, and the conflict in the Middle East that began in February had not yet prompted additional tightening. On a net basis, the share of banks tightening standards was +16% for corporate loans (unchanged from the previous quarter), +4% for residential mortgages (after +11%), and +11% for consumer and other household loans (unchanged). Banks cited higher perceived credit risk and lower risk tolerance as the main drivers, with sector- and firm-specific factors prominent for corporate lending and weaker household creditworthiness featuring for consumer credit; subdued economic conditions and the outlook also weighed. Lending conditions tightened through higher interest rates, slightly wider risk-independent margins in corporate and consumer lending, stricter collateral requirements, and smaller loan sizes, while margins for average-risk mortgages narrowed. Corporate loan demand rose marginally, driven by large firms and short-term borrowing, mainly for mergers and acquisitions, restructuring, inventories and working capital, while demand for investment financing fell; household loan demand declined for the first time since 2023, with a larger drop in consumer credit than in mortgages. Rejection rates increased for corporate and consumer loans, and the non-performing loan (NPL) ratio and other credit-quality indicators exerted a restrictive effect on corporate lending standards. For the second quarter of 2026, banks planned to tighten corporate lending standards by a similar amount, while not ruling out further adjustments given uncertainty around the conflict in the Middle East; for households, they anticipated more restrictive mortgage standards and broadly unchanged consumer-credit standards. Banks expected credit demand to be almost unchanged across segments in the second quarter, and also anticipated credit-quality indicators would continue to restrain corporate lending standards.
German Bundesbank 2026-04-28
German Bundesbank Bank Lending Survey finds German banks tightened corporate credit standards further in Q1 2026
The German Bundesbank’s Bank Lending Survey for Q1 2026 reports continued tightening of standards and terms for corporate and consumer loans, with mortgage standards broadly unchanged and the Middle East conflict not yet prompting extra tightening. Banks cited higher perceived credit risk, lower risk tolerance and weak economic conditions, with rising rejection rates and non-performing loans also restrictive. Corporate loan demand rose slightly while household demand fell. For Q2 2026, banks plan similar tightening for corporate lending, more restrictive mortgage standards, broadly unchanged consumer-credit standards and largely stable credit demand.