Polish banks expect increased loan demand in Q1 2025, except for housing loans
Polish banks anticipate rising demand for all types of loans in the first quarter of 2025, except for housing loans, which are expected to see a decline, according to a survey conducted by the National Bank of Poland (NBP).
The fourth quarter of 2024 saw banks relax lending criteria for consumer loans and the SME sector, mainly due to growing competitive pressure. However, lending conditions remained largely unchanged for housing loans and large enterprises. This period was marked by a notable increase in demand for credit from both households and businesses, according to the NBP report, “The Situation on the Credit Market – Q1 2025 Survey of Credit Committee Chairs.”
For the first quarter of 2025, banks plan to further ease lending conditions for consumer loans and short-term loans for SMEs, while tightening conditions for short-term loans to large enterprises.
Banks expect an increase in demand for corporate, SME, and consumer loans, with large enterprises driving credit growth for working capital, mergers and acquisitions, and investments. The highest demand growth is anticipated among SMEs, reflecting business expansion and investment plans.
However, housing loan demand is expected to decline. While forecasts for the housing market remain positive, weaker household economic conditions and shifts in consumer spending patterns are weighing on mortgage demand.
In Q4 2024, banks reported no major changes in lending criteria for large enterprises, while SMEs saw relaxed conditions due to competitive market pressure. Despite this, some banks cited economic uncertainty and industry-specific risks as reasons for widening credit margins.
For consumer loans, banks eased credit conditions further in Q4 2024, including lowering credit margins, primarily in response to competition. This stimulated loan demand, a trend expected to continue in early 2025.
Looking ahead, the NBP survey indicates that Polish banks will maintain stable lending policies for most loan types, with the exception of tightened criteria for large enterprises and continued easing for SMEs and consumer loans. However, housing loan demand is forecasted to decline, reflecting weaker household confidence and economic headwinds.
Source: ISBnews