In its latest study, the Bank of Canada found that lending in the country has become much stricter in the second quarter of the year.
With an over-20 per cent balance of opinion that “implies a net tightening”, tighter business-lending conditions predominated among corporate borrowers along with small businesses and commercial borrowers in the Prairie region, the BoC said of the results of its Senior Loan Officer Survey (SLOS) released on July 4.
The same results revealed that the energy segment (specifically, oil and gas) was the hardest hit among all borrower categories in Canada.
Q2 2016 also saw tightening in both price (around 15 per cent balance of opinion) and non-price conditions (nearly 40 per cent balance of opinion) for corporate borrowers.
“Lenders also tightened non-price conditions for small business and commercial borrowers. There was a slight easing in price conditions for small businesses,” the report stated.
“The overall demand for credit was roughly unchanged, with less demand from corporate borrowers and generally unchanged demand from small business and commercial borrowers,” it added.
The report concluded with its findings of access to capital markets (for corporate borrowers who do not fall in investment grade), which declined according to majority of the survey respondents.
Brokerages launching lenders: A sign of things to come?
CMBA petitions Lebouthillier for NOA revisions