Bankitalia: war and energy crisis slow down loans and mortgages, banks expect tightening of conditions
International tensions and rising energy costs reduce demand for finance, with banks preparing to tighten lending criteria
Italian banks expect a drop in demand for loans and mortgages from households and businesses in the current quarter due to the war and energy price developments. This is what emerges from the credit survey conducted by the Bank of Italy as part of the ECB. The events 'would have favoured a wait-and-see attitude on the part of companies,' it says. Credit institutions report that, for the same reasons, there will be a 'tightening of financing' with a more pronounced impact on the most exposed sectors.
In the first quarter of 2026, lending criteria for corporate loans remained unchanged and terms and conditions were also broadly stable. The lending criteria for household loans did not change in the mortgages sector, while they were slightly tightened for consumer credit. For the current quarter, banks expect a tightening of supply criteria, marked for business loans and slightly for consumer credit.
Intermediaries indicated that the expectation of tightening in lending to non-financial corporations would be largely attributable to the effects of recent geopolitical developments and energy markets, with the impact more pronounced for the most exposed sectors.
The demand for loans from businesses declined, mainly due to lower financing needs for fixed investments. Household demand for mortgages remained stable overall, while demand for consumer credit increased slightly, supported by higher spending on durable goods and an improvement in consumer confidence.
Banks reported worsening access conditions on the money market, while short-term debt securities and deposits improved slightly.
