In Italy, the fall in bank loans to businesses has so far been 10,5% from the peak in September 2011, equal to -96 billion. The Confindustria Study Center estimates that it will continue this year: -1,0% (-8 billion). In 2015, however, there will be an increase of 2,8% (+22 billion).
The decline started from the supply side and therefore the CSC forecasts are based on the evolution in bank balance sheets of credit risk (currently at its highest levels), the ability to generate profits (at its lowest levels), capital ratios and funding.
For the trend reversal to occur, it is crucial that the evaluation and tests carried out by the ECB confirm the solidity of bank balance sheets so as to instill confidence in Italian institutions on the part of investors and to lower their aversion to risk. If the in-depth analysis by the ECB does not yield these positive results, an adverse scenario could materialize, in which loans would drop by 4,9% in 2014 (-40 billion) and by 1,3% in 2015 (-10 billion ).
Bank lending to businesses has already fallen by more than nominal GDP in 2012-2013; the loan-to-GDP ratio has fallen rapidly and could fall further. The degree of corporate bank debt is far from peak.
In any case, the trend in bank loans in 2014-15 will not be able to fully satisfy the financial needs created by the improvement in demand and economic activity and this makes the development of non-bank financing channels urgent.
