2-5-18 2:14 PM EST | Email Article
By Kate Davidson 

WASHINGTON -- Lenders expect to ease underwriting standards for business loans to large companies in 2018 but tighten standards for commercial real-estate and some consumer loans, according to a Federal Reserve survey released Monday.

The Fed said a moderate net percentage of banks eased standards for business loans to large- and middle-market firms in the fourth quarter, such as decreasing loan rate spreads, increasing maximum sizes of credit lines and easing loan covenants, citing more aggressive competition and an improved economic outlook.

The Fed's survey of senior loan officers also found that a moderate net fraction of banks expect to ease business-lending standards in 2018 for larger firms, and anticipate increased demand for business loans from firms of all sizes.

The same firms said they expect to tighten standards across all categories of commercial real-estate loans this year, with a significant fraction reporting they planned to tighten standards for multifamily residential property loans. Banks also tightened underwriting standards on most categories of commercial real-estate loans in the fourth quarter, while demand for CRE loans weakened, the Fed said.

The outlook for consumer loans was mixed, the survey found. Lenders said they expect to ease standards for mortgages this year, but tighten standards for credit-card loans. A significant share said they see the quality of credit-card loans deteriorating in 2018, while a moderate net share of banks also expect the quality of auto loans to deteriorate.

The survey results are based on responses from loan officers at 71 U.S. banks, which the Fed surveyed in January.

Write to Kate Davidson at kate.davidson@wsj.com


(END) Dow Jones Newswires

February 05, 2018 14:14 ET (19:14 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
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