The German Bundesbank published the October results of its Bank Lending Survey for Germany, reporting that surveyed banks tightened their credit standards for loans to firms and households in the third quarter of 2025. Banks attributed the tightening mainly to higher perceived credit risk and, for consumer and other household credit, a decline in risk tolerance, while loan demand continued to rise across all segments but less strongly than in the previous quarter. In net terms, +10% of banks tightened standards for corporate loans (up from +3% in the previous quarter), primarily affecting large enterprises, while tightening for household credit was reported for mortgages (+4%, down from +11%) and for consumer and other household loans (+7%, down from +11%). Contractual lending conditions also became more restrictive for corporate lending and mortgages, driven by higher lending rates and higher margins independent of borrower creditworthiness; mortgage lending additionally saw a reduction in average loan-to-value ratios. By contrast, conditions for consumer and other household loans eased marginally overall, as banks lowered rates and margins for riskier loans, which they linked to improved market-based refinancing conditions; the non-performing loan ratio and other credit-quality indicators contributed to a more restrictive supply stance for corporate loans and consumer lending. For the fourth quarter of 2025, banks planned no change to corporate credit standards but expected further tightening for household credit. They anticipated further demand increases for corporate loans and mortgages, while expecting a decline in demand for consumer and other household loans; banks also expected the European Central Bank Governing Council’s past and anticipated policy rate decisions to continue weighing negatively on net interest income and overall profitability in the winter half-year 2025/26.

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