LONDON (Reuters) - British banks do not expect to be more willing to lend to companies in the second quarter despite a probable increase in demand, a Bank of England survey showed on Wednesday.
The central bank's Credit Conditions Survey showed availability of credit for companies increased in the first three months of 2013 but was confined to large firms and the pace of growth was slower than in the fourth quarter.
Banks reported that small companies showed a big fall in demand for credit as the firms worried about a fragile economic outlook and that banks had a low tolerance for risky loans, the BoE survey said.
Banks polled for the BoE's quarterly Credit Conditions Survey said they would increase the availability of mortgages in the second quarter of 2013 after a rise in the January-March period.
Demand for mortgages increased in the first quarter, albeit at a slower pace than in the previous three months, and was expected to increase significantly in the second quarter.
The BoE's flagship Funding for Lending Scheme was launched last year as the latest attempt to get more credit flowing into the economy. So far, the scheme has had more of an impact on lending for mortgages than on loans for companies.
Banks said the FLS helped them reduce borrowing costs for households and companies and they expected a further tightening of loan spreads in the next three months, the BoE survey found.
(Reporting by David Milliken and William Schomberg)
Source: http://news.yahoo.com/banks-not-plan-big-increase-corporate-lending-second-083315702--business.html
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