The German Bundesbank published the January results of its Bank Lending Survey (BLS) for Germany, showing that banks tightened credit standards across all three lending segments in the fourth quarter of 2025, with the sharpest tightening in corporate lending since 2023. Banks attributed the shift to lower risk tolerance and a further rise in perceived credit risk, while credit demand increased slightly for corporate loans and housing loans. On a net basis, the share of banks tightening standards was +16% for corporate loans (up from +10% in the previous quarter), +11% for housing loans to households (up from +4%) and +11% for consumer and other household credit (up from +7%). Tightening in corporate lending was stronger for large companies than for small and medium-sized enterprises and ran counter to banks’ earlier expectations of no change. Corporate loan terms and conditions also became more restrictive, driven by higher lending rates and wider margins not related to borrower creditworthiness, while housing loan conditions were marginally eased on competitive grounds and consumer credit conditions were unchanged. Rejection rates rose again for corporate lending and increased for consumer credit, while remaining unchanged for housing loans. Banks reported that regulatory and supervisory requirements had restricted lending standards across all segments over the past 12 months and expected continued restrictive effects over the next 12 months, alongside further strengthening of capital positions and an increase in risk-weighted assets linked in particular to new Basel III rules for calculating risk-weighted assets and, for credit standards, to the consumer credit directive applying from 20 November 2026. For the first quarter of 2026, banks planned additional tightening in all segments, expected further increases in demand for corporate and housing loans, and anticipated declining demand for consumer and other household credit.

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