TOKYO (MNI) – Japanese corporate demand for financing via bank
loans fell in the April-June quarter, the first drop in two quarters, as
many firms continue to hold sufficient cash on hand for their operations
and investment needs, according to a survey of senior bank loan officers
by the Bank of Japan released Thursday.
The BOJ’s index for corporate fund demand, which is calculated by
subtracting the number of banks reporting a decline in lending from the
number reporting an increase, fell to -3 in the second quarter from +6
in January-March.
But the index is expected to rebound to +1 in third calendar
quarter, the quarterly survey showed.
Loan officers cited the drop in bank lending rates as the top
reason for some firms increasing their funding demands in April-June,
according to the survey conducted from June 11 to July 9.
Corporate funding costs continue to fall, with lending rates
offered by domestic banks dropping to an average 0.989% in May, slipping
below 1% for the first time since comparable data became available in
1993.
Today’s results are consistent with the results of the BOJ’s June
Tankan corporate sentiment survey released on July 2.
The Tankan showed both financial positions among borrowers and the
lending attitude among financial institutions were “easier” than three
months earlier, the first such improvement in three quarters for large
firms and the first in two quarters for small businesses.
According to the senior loan officer survey, the index for demand
from major companies eased to +2, down from +9 the previous quarter,
while the index for small businesses also fell to -6 from +4.
The BOJ’s senior loan officer index surged to a record high of +43
in the final quarter of 2008 from -5 in the previous quarter after the
collapse of Lehman Brothers and the resulting financial crisis hurt
companies’ ability to borrow directly from financial markets.
tokyo@marketnews.com
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