Felix Huefner

Arpitha Bykere

Litia Shaw

Global Macroeconomic Analysis

DEPUTY DIRECTOR
1-202-857-3651
fhuefner@iif.com

RESEARCH ASSISTANT
1-202-857-3308
abykere@iif.com

SENIOR PROGRAM
ASSISTANT
1-202-857-3659
lshaw@iif.com

July 24, 2013

Emerging Markets Bank Lending Conditions Survey

- 2013Q2

The IIF Emerging Markets Bank Lending Conditions index fell for the first time in 18 months, owing to a sharp deterioration in funding conditions

The index now stands below the 50 mark at 49.5, implying that lending conditions tightened again after having improved in recent quarters

The weaker overall index reading was due to tighter lending conditions in LATAM and in particular Emerging ASIA

Banks witnessed a faster rise in nonperforming loans relative to 2013Q1

EM BANK LENDING CONDITIONS TIGHTEN AGAIN

EM Bank Lending Conditions Index*

diffusion index (50=neutral), average of answers to all 14 questions

The composite index of the IIFs Emerging Markets Bank Lending Conditions (EMLC)
Survey declined for the first time since 2011Q4 and now stands slightly below the 50

54

mark, showing that overall bank lending conditions tightened somewhat after

52

improving in the past two quarters (top chart).

50

Overall funding conditions deteriorated most, with the index tumbling below 50 for the

48

first time since 2012Q2 though the deterioration was mild compared to 2011-12

46

53.0

48.6

market volatility and dampened capital flows to emerging markets. Domestic funding

The supply of trade finance moderated and the demand for trade finance declined in

50.6
49.5

48.6

44
42
11Q2

conditions also deteriorated, mainly in LATAM and Emerging ASIA, as asset markets
sold off and liquidity conditions tightened.

50.5

44.7

(bottom chart). International funding conditions tightened, led by Emerging ASIA as

discussions about a tapering of asset purchases by the Fed increased financial

49.9

49.1

11Q4

12Q2

12Q4

13Q2

*Values above 50 indicate improving conditions; values below 50 indicate deteriorating conditions

Conditions by Category
diffusion index (50=neutral)

Credit Standards

Demand for Loans

LATAM and slowed in Emerging ASIA and Emerging EUROPE owing to weaker

Nonperforming Loans

Funding Conditions

exports and shipping activity earlier in the quarter.

60

Trade Finance

Non-performing loans (NPLs) accelerated in 2013Q2, specifically in Emerging ASIA

55

and LATAM due to the lagged effects of weak domestic and external demand and

50

corporate profitability. Banks expect a further deterioration in asset quality in 2013Q3.

45

Due to these factors, banks continued to tighten credit standards. The overall growth

40

in loan demand was broadly unchanged from 2013Q1, despite policy rate cuts, with
higher loan demand in AFME (see page 7) and Emerging EUROPE offsetting lower

35

loan demand in LATAM and Emerging ASIA.

30
11Q2

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11Q4

12Q2

12Q4

13Q2

page 2

July 25, 2013

Summary
ASIA
diffusion index
50=neutral

ASIA

Credit Standards

Demand for Loans

Funding Conditions

Nonperforming Loans

Trade Finance

LATAM
diffusion index
50=neutral

65

65

60

60

LATAM

Credit Standards

Demand for Loans

Funding Conditions

Nonperforming Loans

Trade Finance

55

55

50
50

45
45

40

40

35
30

35
11Q2

11Q4

12Q2

12Q4

The headline index for Emerging ASIA fell to the lowest level since the
beginning of the survey, reversing recent improvements. Domestic and
international funding conditions deteriorated significantly after having eased
in recent quarters. Credit standards tightened further as NPLs accelerated.
Moreover, loan demand declined to the lowest level since 2009Q4.
AFME
diffusion index
50=neutral

11Q2

13Q2

AFME

Credit Standards

Demand for Loans

Funding Conditions

Nonperforming Loans

Trade Finance

11Q4

12Q2

12Q4

13Q2

Bank lending conditions in LATAM tightened for the first time since 2011Q4
as demand for loans declined further, credit standards continued to tighten
and NPLs increased after having fallen in 2013Q1. Moreover, trade finance
and domestic funding conditions tightened while the improvement in
international funding conditions slowed.
EUROPE
diffusion index
50=neutral

EUROPE

Credit Standards

Demand for Loans

Funding Conditions

Nonperforming Loans

Trade Finance

65

60

60

55

55
50

50

45

45

40
35

40

30

35

25

30

20

11Q2

11Q4

12Q2

12Q4

13Q2

Overall lending conditions in AFME continued to improve, reaching the

highest level since 2011Q2. Loan demand accelerated further while NPLs
continued to decline and the tightening of credit standards moderated.
However, international funding conditions tightened further and domestic
funding conditions improved at a slower pace.
IIF.com Copyright 2013. The Institute of International Finance, Inc. All rights reserved.

11Q2

11Q4

12Q2

12Q4

13Q2

In Emerging EUROPE, the headline index for bank lending conditions stood
at 51.6, close to its 2013Q1 level. Credit standards eased further while loan
demand stayed robust and NPLs continued to moderate. However,
international funding conditions tightened for the first time since 2012Q2
and the improvement in domestic funding conditions moderated.

July 25, 2013

page 3

Summary

OVERALL LENDING CONDITIONS (Average of all 14 Indices)

The IIFs latest EM Bank Lending Conditions Survey was conducted between June 10 and

EM Bank Lending Condition Indices

diffusion index
50=neutral

July 16, 2013. For the fifteenth survey, 133 banks from emerging markets participated (29

55

GLOBAL

AFME

LATAM

EUROPE

ASIA

from LATAM, 23 Emerging EUROPE, 21 Emerging ASIA, 22 SSA, and 38 MENA). The
composite index, which averages the results of 14 questions of the survey across regions,
declined 1.1pt to 49.5 in 2013Q2 as funding conditions tightened substantially after improving

50

in the past three quarters.

45

Overall bank lending conditions tightened in LATAM and particularly in Emerging ASIA, which
showed the tightest lending conditions among all regions (top chart). On the other hand, the

40

improvement in Emerging EUROPEs lending conditions continued from 2013Q1 and AFME
witnessed a further easing in lending conditions (see page 7).
35
11Q2

The headline global index for funding conditions plunged to 48.2 with both domestic and

11Q4

12Q2

12Q4

13Q2

international funding conditions indices dropping below 50 for the first time since 2012Q2
(bottom chart). Domestic funding conditions tightened the most in Emerging ASIA and eased
the most in Emerging EUROPE. International funding conditions also tightened the most in
Emerging ASIA and eased the most in LATAM (see page 5).
The overall index for credit standards remained below 50 but reached the highest level since
2011Q1 as banks tightened credit standards at a slower pace, with the exception of
Emerging ASIA (see page 4). By loan category, credit standards tightened the least for

Funding Conditions
diffusion index
50=neutral

GLOBAL

AFME

LATAM

EUROPE

ASIA

70
60

consumer loans and tightened most for commercial real estate loans in all regions (except
Emerging ASIA where credit standards tightened most for residential real estate loans).

50

Overall loan demand continued to decline in LATAM and Emerging ASIA whereas it increased

40

at a pace similar to 2013Q1 in Emerging EUROPE and picked up steadily in AFME (see page
4). By loan category, all regions witnessed an increase in residential real estate loan demand.

30

Consumer loan demand continued to rise except in Emerging ASIA. Business loan demand
picked up in all regions with the exception of LATAM. On the other hand, all regions other
than AFME showed a decline in commercial real estate loan demand.

IIF.com Copyright 2013. The Institute of International Finance, Inc. All rights reserved.

20
11Q2

11Q4

12Q2

12Q4

13Q2

July 25, 2013

page 4

Summary

CREDIT STANDARDS (Average of Questions 1-4)

The headline index for credit standards ticked up 1pt to 47.4 in 2013Q2.

Credit Standards
diffusion index
50=neutral

GLOBAL

AFME

LATAM

EUROPE

ASIA

55

In Emerging EUROPE, the index improved markedly for the second straight quarter as banks
stopped tightening credit standards for commercial real estate loans for the first time since

50

2011Q1, and continued to ease credit standards for other loan categories.
In LATAM, the tightening of credit standards slowed marginally across all loan categories

45

except commercial real estate loans.

On the other hand, banks in Emerging ASIA tightened credit standards further, particularly for

40

consumer loans. On the whole, credit standards tightened most for residential real estate
loans. These trends are in line with rising NPLs and policy measures to tighten regulatory

35
11Q2

standards for loans.

DEMAND FOR LOANS (Average of Questions 5-8)
The headline index for loan demand edged up 0.5pt to 51.6 in 2013Q2.
Loan demand in Emerging EUROPE grew around the same pace as in 2013Q1. A further
decline in commercial real estate loan demand was offset by higher consumer, housing and

11Q4

12Q2

Demand for Loans

diffusion index
50=breakeven

12Q4

13Q2

GLOBAL

AFME

LATAM

EUROPE

ASIA

65
60

particularly business loan demand as manufacturing activity and consumption stayed

relatively stable.

55

By contrast, loan demand in LATAM decreased for the third consecutive quarter. Loan

50

demand from businesses was the weakest among the four loan categories. On a positive
note, residential real estate loan demand continued to rise while consumer loan demand

45

increased following a temporary drop in 2013Q1.

40

Loan demand in Emerging ASIA decreased for the second straight quarter. Consumer loan
demand continued to decline while commercial real estate loan demand fell for the first time
since 2011Q4. Business loan demand stayed on a downward trend, given soft capex and
exports. On the other hand, residential real estate loan demand increased, partly owing to a
stable labor market.

IIF.com Copyright 2013. The Institute of International Finance, Inc. All rights reserved.

11Q2

11Q4

12Q2

12Q4

13Q2

July 25, 2013

page 5

Summary

FUNDING CONDITIONS IN DETAIL: DOMESTIC FUNDING (Question 9)

The index for domestic funding conditions plunged below 50 to 48.2, the lowest level since
2012Q2 as asset market sell-offs and consequent policy measures to counter currency
depreciation in most emerging markets in our survey led to tighter liquidity and higher
domestic spreads. Yet, the index stayed above the lows witnessed in 2011.
In LATAM, funding conditions tightened for the first time since 2012Q3 with the index falling
to 49.1.

Domestic Funding Conditions

diffusion index
50=neutral

GLOBAL

AFME

LATAM

EUROPE

ASIA

70
60
50
40

The local funding conditions index in Emerging ASIA also declined substantially, reaching
45.2, the lowest level since 2011Q3. Around 38% of the surveyed banks experienced a
tightening in funding conditions compared to just 15% in the 2013Q1 survey, while only 19%
of the banks reported an easing in funding conditions compared to 50% in 2013Q1.

30
20
11Q2

11Q4

12Q2

12Q4

13Q2

By contrast, funding conditions in Emerging EUROPE continued to ease. Yet, the index
declined markedly to 52.2 from 60.9 in 2013Q1 as about 17% of the surveyed banks
reported that funding conditions tightened compared to only 9% in the 2013Q1 survey.

The index for international funding conditions fell below 50 to 46.9, reversing the easing

International Funding Conditions

diffusion index
50=neutral

witnessed since 2012Q3. Nonetheless, the index stayed above the lows of 2011.

70

In Emerging ASIA, external funding conditions tightened significantly as the index fell below 50

60

FUNDING CONDITIONS IN DETAIL: INTERNATIONAL FUNDING (Question 10)

GLOBAL

AFME

LATAM

EUROPE

ASIA

to 41.7 owing to strong linkages with the global financial markets. Around 48% of the banks
witnessed a tightening in funding conditions compared to just 16% in the 2013Q1 survey.

50

Only 14% of the banks reported an easing in funding conditions compared to 45% in
2013Q1.

40

Likewise, funding conditions in Emerging EUROPE tightened markedly after having eased

30

since 2012Q3. About 17% of the banks reported a tightening in funding conditions, while only
13% of the banks witnessed an easing in funding conditions compared to 35% in 2013Q1.
On the other hand, external funding conditions in LATAM continued to ease though the index
declined somewhat to 52.6 from 55.6 in 2013Q1.
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20
11Q2

11Q4

12Q2

12Q4

13Q2

July 25, 2013

page 6

Summary

INTERNATIONAL TRADE FINANCE (Average of Questions 11-12)

The overall index for international trade finance fell for the second consecutive quarter to 52 in
2013Q2. The supply of trade finance increased at a slower rate with the index falling to 54.

Trade Finance
diffusion index
50=neutral

GLOBAL

AFME

LATAM

EUROPE

ASIA

65

Notably, the demand for trade finance declined for the first time in the survey with the index
falling to 49.9.

60

Overall trade finance conditions tightened in LATAM with the index falling markedly to 49.2.
While the supply of trade finance slowed, the index for demand for trade finance declined for

55

the first time in the survey to 44 as weak global demand weighed on exports.
50

In Emerging ASIA, both the demand and supply of trade finance continued to slow with the
corresponding indices falling to 50 and 51.2 respectively owing to softer exports.

45
11Q2

In Emerging EUROPE, the supply of trade finance was broadly unchanged from 2013Q1 but

11Q4

12Q2

12Q4

13Q2

the demand for trade finance continued to moderate with the index falling to 50.

NONPERFORMING LOANS (Average of Questions 13-14)

The overall index for NPLs declined 1pt to 48.1. Note that a reading of the NPL index below
50 implies a rise in the volume of NPLs. Bank asset quality deteriorated at a faster rate in

Nonperforming Loans*
diffusion index
50=neutral

GLOBAL

AFME

LATAM

EUROPE

ASIA

60

2013Q2 and banks expect NPLs to continue rising in 2013Q3.

55

Banks in LATAM witnessed a significant rise in NPLs in 2013Q2 following a decline in the
previous two quarters. Moreover, banks expect NPLs to continue to increase in 2013Q3.

50

In Emerging ASIA, NPLs increased at a faster pace after easing somewhat in 2013Q1, in line

45

with weak consumption and capex. Banks expect NPLs to rise in 2013Q3 as well.
40

NPLs in Emerging EUROPE continued to grow at a slower pace in 2013Q2 with the index
reaching the highest level since 2011Q3. Banks expect this trend to continue in 2013Q3.

35
11Q2

11Q4

12Q2

*A reading of the NPL index below 50 implies rising NPLs

IIF.com Copyright 2013. The Institute of International Finance, Inc. All rights reserved.

12Q4

13Q2

July 25, 2013

page 7

Summary

AFRICA/MIDDLE EAST IN DETAIL: MIDDLE EAST & NORTH AFRICA (MENA)

Overall bank lending conditions in MENA improved for the second quarter in a row with the
index reaching 52.7, the highest level since its inception in 2011Q4. The tightening in credit

MENA
diffusion index
50=neutral

MENA

Credit Standards

Demand for Loans

Funding Conditions

Nonperforming Loans

Trade Finance

60

standards continued to moderate. Credit standards for commercial real estate were tightened
at a slower pace but those for business loans were tightened further. Credit standards for
consumer loans were loosened and those for residential loans continued to be eased.

55
50

Loan demand maintained its upward trend with the index reaching a series high led by
increases in business as well as commercial and residential real estate loan demand.
Consumer loan demand continued to grow at a pace similar to 2013Q1.
Moreover, overall funding conditions eased for the first time in the series with the index
reaching 50. The tightening in international funding conditions moderated somewhat from

45
40
35
11Q4

12Q1

12Q2

12Q3

12Q4

13Q1

13Q2

2013Q1. Domestic funding conditions continued to improve, though at a slower pace amidst
mild currency volatility and spread increases. Another bright spot was that NPLs declined at a
quicker pace and banks expect NPLs to fall in 2013Q3 as well.
AFRICA/MIDDLE EAST IN DETAIL: SUB-SAHARAN AFRICA (SSA)
Bank lending conditions improved further in SSA with the index reaching 53.5 in 2013Q2.

SSA
diffusion index
50=neutral

The tightening of credit standards slowed significantly, particularly for commercial and

65

residential real estate loans.

60

The index for loan demand hit a series high as demand for loans continued to increase

55

across all loan categories, particularly for consumer and business loans whose indices

50

reached the highest level in the survey.

45

However, overall funding conditions tightened as the improvement in domestic funding

conditions moderated and international funding conditions tightened further.

SSA

Credit Standards

Demand for Loans

Funding Conditions

Nonperforming Loans

Trade Finance

40
35
30

While the increase in demand for trade finance remained relatively unchanged from 2013Q1,
the supply of trade finance slowed.
NPLs declined at a faster pace in 2013Q2. However, banks expect NPLs to fall at a slower
rate in 2013Q3. This kept the overall NPL index broadly unchanged from 2013Q1.
IIF.com Copyright 2013. The Institute of International Finance, Inc. All rights reserved.

25
11Q4

12Q1

12Q2

12Q3

12Q4

13Q1

13Q2

July 25, 2013

GENERAL NOTES

page 8

Background

The Emerging Markets Bank Lending Conditions Survey (EMLC) is addressed to Senior Loan Officers, Chief

Sample Size over Time

# of banks

Credit Officers or other senior officers in equivalent positions from banks based in emerging markets. The

150

Statistical Break*

141
132 132 132

questions address five topics: 1) Credit standards for business, consumer and real estate loans; 2) Demand

125

133 133

114

for business, consumer and real estate loans; 3) Domestic and international funding conditions; 4) Demand
and supply conditions for trade finance; and 5) The evolution of nonperforming loans. Regional indices for
each question are calculated using the diffusion index methodology specified below. Regional indices for

100
75

67 63

each of the five categories are simple averages of indices for specific questions in each category: credit
standards: questions 1-4, demand for loans: questions 5-8, funding conditions: questions 9-10, trade
finance: questions 11-12, and nonperforming loans: questions 13-14. The global indices for each category
are then calculated as a non-weighted average of these regional indices by category. Finally, the overall
regional index is an average of the indices for the 14 questions and the Global EMLC Index is then calculated
as an average of these regional indices. See the table in the Appendix (page 18) for detailed results.

For the 15th EMLC survey, 133 banks participated, which included 60 banks from Africa and the Middle East
(AFME), 29 banks from Latin America (LATAM), 23 banks from Emerging EUROPE, and 21 banks from

45

50
25

20 21 18

0
10Q2

10Q4

11Q2

11Q4

12Q2

12Q4

13Q2

*In the first quarter of 2011, we increased the number of banks we sent the
survey to, from around 35 banks composing the IIF Emerging Markets Advisory

Regional Distribution of Banks

# of banks
ASIA
21

Emerging ASIA. The survey was conducted between June 10 and July 16, 2013 and all questions were
SSA
22

related to the changes that occurred during the second quarter of 2013 unless otherwise stated. Not all

AFME
60

banks could answer all the 14 questions that comprised the survey due to their specialization, and the
number of answers received for each question is indicated in the detailed survey results. The survey results

EUROPE
23

MENA
38

are displayed in two different parts:

The Lending Conditions Outlook compares results with the G3 lending surveys (pages 9-10).
The Survey Results are displayed as a net percentage of total answers (left-hand side), and as a regional
diffusion index (right-hand side; pages 11-17).

LATAM
29

The diffusion index is designed to capture the distribution of answers to each question in one number. To calculate the indices, each type of answer is assigned a
value: 0 if conditions have tightened/demand has decreased considerably; 25 if conditions have tightened/demand has decreased somewhat; 50 if conditions/
demand remained unchanged; 75 if conditions have eased/demand has increased somewhat; and 100 if conditions have eased/demand has increased
considerably. The average (mean) of the answers is then calculated using these values, and this percent is the diffusion index number. A diffusion index reading of
50 should be interpreted as a neutral reading to the question; a value above 50 (the maximum is 100) reflects strength; a value less than 50 (the minimum is 0)
reflects weakness.
IIF.com Copyright 2013. The Institute of International Finance, Inc. All rights reserved.

July 25, 2013

page 9

Lending Conditions Outlook

COMPARISON WITH G3* BANK LENDING CONDITIONS: SUPPLY

Credit Standards for Corporate Loans

50 = breakeven

IIF EM

Fed

ECB

BoJ**

60

Credit Standards for Consumer Loans

50 = breakeven

IIF EM

Fed

ECB

BoJ**

65
60

55

55
50

50
45

45

40

40
10Q2

10Q4

11Q2

11Q4

12Q2

12Q4

13Q2

10Q2

10Q4

11Q2

11Q4

12Q2

12Q4

13Q2

**Total consumer lending

**Large firms

Credit Standards for Commercial Real Estate Loans

50 = breakeven

IIF EM

Fed

60
55

Credit Standards for Residential Real Estate Loans

50 = breakeven

IIF EM

60

ECB

Fed**

55

50

50
45

45

40

40

35
10Q2

10Q4

11Q2

11Q4

12Q2

12Q4

13Q2

10Q2

10Q4

11Q2

11Q4

12Q2

12Q4

**Prime mortgage
*G3 surveys used: Fed Senior Loan Officer Opinion Survey on Bank Lending Practices (13Q1); ECB Bank Lending Survey (13Q2); BoJ Senior Loan Officer Opinion Survey on Bank Lending Practices at Large Japanese Banks (13Q2).

IIF.com Copyright 2013. The Institute of International Finance, Inc. All rights reserved.

13Q2

July 25, 2013

page 10

Lending Conditions Outlook

COMPARISON WITH G3* BANK LENDING CONDITIONS: DEMAND

Demand for Corporate Loans

50 = breakeven

IIF EM

Fed

ECB

BoJ**

65

Demand for Consumer Loans

50 = breakeven
70

IIF EM

Fed

ECB

BoJ

65

60

60
55

55
50

50

45

45
40

40
10Q2

10Q4

11Q2

11Q4

12Q2

12Q4

10Q2

13Q2

10Q4

11Q2

11Q4

12Q2

12Q4

13Q2

**Large firms

Demand for Commercial Real Estate Loans

50 = breakeven

IIF EM

65

BoJ**

Fed

Demand for Residential Real Estate Loans

50 = breakeven

IIF EM

Fed**

ECB

BoJ

70
65

60

60
55

55
50

50

45
40

45

35
30

40
10Q2

10Q4

11Q2

11Q4

12Q2

12Q4

**Large firms

13Q2

10Q2

10Q4

11Q2

11Q4

12Q2

12Q4

**Prime mortgage

*G3 surveys used: Fed Senior Loan Officer Opinion Survey on Bank Lending Practices (13Q1); ECB Bank Lending Survey (13Q2); BoJ Senior Loan Officer Opinion Survey on Bank Lending Practices at Large Japanese Banks (13Q2).

IIF.com Copyright 2013. The Institute of International Finance, Inc. All rights reserved.

13Q2

July 25, 2013

page 11

Emerging Markets Bank Lending Conditions Survey

RESULTS: CREDIT STANDARDS
1. Over the past three months, how have your banks credit standards as applied to loans to commercial and industrial enterprises changed?

Answers:131
80%

55

Eased

72.5%

60%

50

40%
45

16.8%

20%

Tightened

9.2%
1.5%
0%

Tightened
Considerably

0.0%
Tightened
Somewhat

Remained
Unchanged

Eased
Somewhat

Eased
Considerably

40
GLOBAL

AFME

LATAM

EUROPE

ASIA

EUROPE

ASIA

2. Over the past three months, how have your banks credit standards as applied to loans for commercial real estate changed?

Answers: 126
70%

55

Eased

66.7%

60%
50

50%
40%
30%

23.0%

45

20%

Tightened

9.5%
10%

0.8%

0.0%

0%
Tightened
Considerably

Tightened
Somewhat

Remained
Unchanged

Eased
Somewhat

IIF.com Copyright 2013. The Institute of International Finance, Inc. All rights reserved.

Eased
Considerably

40
GLOBAL

AFME

LATAM

July 25, 2013

page 12

Emerging Markets Bank Lending Conditions Survey

RESULTS: CREDIT STANDARDS (CONTINUED)
3. Over the past three months, how have your banks credit standards as applied to loans for residential real estate changed?

Answers: 124
80%

55

50

60%

45

40%

15.3%

20%

Tightened
Considerably

Tightened

40

10.5%
1.6%

0%

Eased

72.6%

0.0%
Tightened
Somewhat

Remained
Unchanged

Eased
Somewhat

Eased
Considerably

35
GLOBAL

AFME

LATAM

EUROPE

ASIA

4. Over the past three months, how have your banks credit standards as applied to other consumer lending (excluding residential mortgages) changed?

Answers: 124

55

70%

Eased

59.7%

60%
50%

50

40%
30%

Tightened

21.8%

20%
10%

45

16.9%
1.6%

0%
Tightened
Considerably

0.0%
Tightened
Somewhat

Remained
Unchanged

Eased
Somewhat

IIF.com Copyright 2013. The Institute of International Finance, Inc. All rights reserved.

Eased
Considerably

40
GLOBAL

AFME

LATAM

EUROPE

ASIA

July 25, 2013

page 13

Emerging Markets Bank Lending Conditions Survey

RESULTS: DEMAND FOR LOANS
5. Over the past three months, how has the demand for loans from your banks commercial and industrial clients changed?

Answers: 133

60

50%
41.4%
40%

Increased
55

33.8%

30%

24.1%

50

20%
45

10%
0.8%

0.0%
0%

Decreased
Considerably

Decreased

Decreased
Somewhat

Remained
Unchanged

Increased
Somewhat

Increased
Considerably

40
GLOBAL

AFME

LATAM

EUROPE

ASIA

LATAM

EUROPE

ASIA

6. Over the past three months, how has the demand for loans from your banks commercial real estate clients changed?

Answers:126
60%

55

Increased

54.0%

50

40%
24.6%
19.8%
20%

45

0.8%
0%

Decreased
Considerably

Decreased

0.8%
Decreased
Somewhat

Remained
Unchanged

Increased
Somewhat

IIF.com Copyright 2013. The Institute of International Finance, Inc. All rights reserved.

Increased
Considerably

40
GLOBAL

AFME

July 25, 2013

page 14

Emerging Markets Bank Lending Conditions Survey

RESULTS: DEMAND FOR LOANS (CONTINUED)
7. Over the past three months, how has the demand for loans from your banks residential real estate clients changed?

Answers: 123
50%

60

46.3%

40%

34.1%

55

30%
Increased

17.1%

20%

50
Decreased

10%
1.6%
0%
Decreased
Considerably

0.8%
Decreased
Somewhat

Remained
Unchanged

Increased
Somewhat

Increased
Considerably

45
GLOBAL

AFME

LATAM

EUROPE

ASIA

LATAM

EUROPE

ASIA

8. Over the past three months, how has the demand for consumer loans (other than residential mortgages) changed?

Answers:123

65

60%
51.2%
60

40%
30.9%
55
Increased

20%

13.8%
50

4.1%

Decreased

0.0%
0%

Decreased
Considerably

Decreased
Somewhat

Remained
Unchanged

Increased
Somewhat

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Increased
Considerably

45
GLOBAL

AFME

July 25, 2013

page 15

Emerging Markets Bank Lending Conditions Survey

RESULTS: FUNDING CONDITIONS
9. Over the past three months, how have local funding conditions changed?

Answers: 128
60%

55

50

40%
23.4%

20.3%
20%

45

2.3%
0%

Eased

53.1%

Tightened
Considerably

Tightened

0.8%
Tightened
Somewhat

Remained
Unchanged

Eased
Somewhat

Eased
Considerably

40
GLOBAL

AFME

LATAM

AFME

LATAM

EUROPE

ASIA

10. Over the past three months, how have funding conditions in international markets changed?

Answers:131

55

70%

Eased

58.8%

60%
50%

50

40%
30%
19.8%
10%

45

16.8%

20%

Tightened

4.6%
0.0%

0%
Tightened
Considerably

Tightened
Somewhat

Remained
Unchanged

Eased
Somewhat

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Eased
Considerably

40
GLOBAL

EUROPE

ASIA

July 25, 2013

page 16

Emerging Markets Bank Lending Conditions Survey

RESULTS: INTERNATIONAL TRADE FINANCE
11. Over the past three months, how has your willingness to supply international trade finance changed?

Answers:128
80%

60

71.9%

60%

55
Increased

40%
50

19.5%
20%
0.8%
0%

Decreased
Considerably

Decreased

4.7%
Decreased
Somewhat

3.1%
Remained
Unchanged

Increased
Somewhat

Increased
Considerably

45
GLOBAL

AFME

LATAM

EUROPE

ASIA

LATAM

EUROPE

ASIA

12. Over the past three months, how has the demand for international trade finance from your clients changed?

Answers:129
70%

60

63.6%

Increased

60%

55

50%
40%

50

30%
19.4%

16.3%

20%

45
Decreased

10%
0.8%

0.0%
0%

Decreased
Considerably

Decreased
Somewhat

Remained
Unchanged

Increased
Somewhat

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Increased
Considerably

40
GLOBAL

AFME

July 25, 2013

page 17

Emerging Markets Bank Lending Conditions Survey

RESULTS: NONPERFORMING LOANS
13. Over the past three months, how have nonperforming loans evolved in your bank lending portfolio?

Answers: 133

60

60%
51.1%

Fallen
55

40%
50

24.1%

22.6%
20%

45
Risen

1.5%
0%

Risen
Considerably

0.8%
Risen
Somewhat

Remained
Unchanged

Fallen
Somewhat

Fallen
Considerably

40
GLOBAL

AFME

LATAM

EUROPE

ASIA

LATAM

EUROPE

ASIA

14. Over the next three months, how do you expect nonperforming loans to evolve in your bank lending portfolio?

Answers:133

60

60%
51.9%

Fall
55

40%
50

24.8%
21.1%
20%

45

0.0%
0%

Rise
Considerably

Rise

2.3%
Rise
Somewhat

Remain
Unchanged

Fall
Somewhat

IIF.com Copyright 2013. The Institute of International Finance, Inc. All rights reserved.

Fall
Considerably

40
GLOBAL

AFME

July 25, 2013

page 18

Appendix
DIFFUSION INDICES*
Question

Global

AFME

MENA**

SSA**

LATAM

EUROPE

ASIA

47.4

47.6

48.3

46.4

46.1

53.5

42.3

1. Commercial and Industrial Enterprises

47.6

46.1

46.6

45.2

48.3

53.3

42.9

2. Commercial Real Estate

46.5

45.8

44.4

48.6

44.0

52.3

44.0

3. Residential Real Estate

47.2

50.9

52.1

48.6

44.8

53.6

39.3

4. Other Consumer Lending

48.2

47.6

50.0

43.1

47.4

54.8

42.9

51.6

57.6

55.7

61.0

47.2

52.9

48.8

5. Commercial and Industrial Clients

51.0

58.8

55.3

64.8

42.2

54.3

48.8

6. Commercial Real Estate Clients

47.7

52.8

52.8

52.8

44.8

44.3

48.8

Credit Standards

Demand for Loans

7. Residential Real Estate Clients

53.6

55.3

55.1

55.6

50.9

57.1

51.2

8. Demand for Consumer Loans

54.2

63.5

59.6

70.8

50.9

56.0

46.4

48.2

48.5

50.0

46.0

50.9

50.0

43.5

9. Domestic Funding Conditions

49.5

51.4

52.1

50.0

49.1

52.2

45.2

10. Funding Conditions in International Markets

46.9

45.7

47.9

42.0

52.6

47.8

41.7

52.0

56.1

56.4

55.7

49.2

51.9

50.6

Funding Conditions

Trade Finance
11. Supply of International Trade Finance

54.0

56.8

57.4

55.7

54.5

53.8

51.2

12. Demand for International Trade Finance

49.9

55.5

55.4

55.7

44.0

50.0

50.0

48.1

55.4

54.3

57.4

46.6

46.2

44.0

13. Evolution in Past 3 Months

47.9

55.4

54.6

56.8

46.6

44.6

45.2

14. Expected Evolution in Next 3 Months

48.2

55.4

53.9

58.0

46.6

47.8

42.9

49.5

52.9

52.7

53.4

47.6

51.6

45.7

NPLs

Total

*The underlying data can be downloaded at http://www.iif.com/emr/global/emls/

**Sub-Index for AFME

For questions or comments, please contact Litia Shaw: +1-202-857-3659 or lshaw@iif.com.

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