German banks participating in the Bank Lending Survey (BLS) tightened credit standards for loans to enterprises and households in the fourth quarter of 2025, marking the strongest tightening since 2023. The adjustment followed reduced risk tolerance and increased credit risk, with regulatory pressures and non-performing loan (NPL) ratios further restricting lending. Credit standards for enterprise loans were most stringent in real estate, manufacturing, and construction. Household loan standards for home purchases saw marginal easing, while consumer credit terms remained unchanged. Demand for enterprise loans and home purchase loans rose slightly, though below expectations. Banks anticipate further tightening in Q1 2026, citing ongoing regulatory constraints and economic uncertainty. The BLS, conducted between December 2025 and January 2026, involved 33 German banks with a 100% response rate.
© Deutsche Bundesbank.
Summary adapted from the Bundesbank website (https://www.bundesbank.de).
Original source © Deutsche Bundesbank.
https://www.bundesbank.de/en/press/press-releases/january-results-of-the-bank-lending-survey-in-germany-936652
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