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Senior Loan Officer Opinion Survey on Bank Lending Practices
April 2016

Survey | Full report (PDF)
Table 1 | Table 2 |Chart data
Table 1 (PDF) | Table 2 (PDF) | Charts (PDF)

Table 2

Senior Loan Officer Opinion Survey on Bank Lending Practices
at Selected Branches and Agencies of Foreign Banks in the United States 1

(Status of policy as of April 2016)

Questions 1-6 ask about commercial and industrial (C&I) loans at your bank. Questions 1-3 deal with changes in your bank's lending policies over the past three months. Questions 4-5 deal with changes in demand for C&I loans over the past three months. Question 6 asks about changes in prospective demand for C&I loans at your bank, as indicated by the volume of recent inquiries about the availability of new credit lines or increases in existing lines. If your bank's lending policies have not changed over the past three months, please report them as unchanged even if the policies are either restrictive or accommodative relative to longer-term norms. If your bank's policies have tightened or eased over the past three months, please so report them regardless of how they stand relative to longer-term norms. Also, please report changes in enforcement of existing policies as changes in policies.

1. Over the past three months, how have your bank's credit standards for approving applications for C&I loans or credit lines—other than those to be used to finance mergers and acquisitions—changed?

 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 6 27.3
Remained basically unchanged 16 72.7
Eased somewhat 0 0.0
Eased considerably 0 0.0
Total 22 100.0

2. For applications for C&I loans or credit lines—other than those to be used to finance mergers and acquisitions—that your bank currently is willing to approve, how have the terms of those loans changed over the past three months?

 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 4 18.2
Remained basically unchanged 17 77.3
Eased somewhat 1 4.5
Eased considerably 0 0.0
Total 22 100.0
 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 2 9.1
Remained basically unchanged 20 90.9
Eased somewhat 0 0.0
Eased considerably 0 0.0
Total 22 100.0

 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 3 13.6
Remained basically unchanged 19 86.4
Eased somewhat 0 0.0
Eased considerably 0 0.0
Total 22 100.0
 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 4 18.2
Remained basically unchanged 18 81.8
Eased somewhat 0 0.0
Eased considerably 0 0.0
Total 22 100.0
 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 6 27.3
Remained basically unchanged 16 72.7
Eased somewhat 0 0.0
Eased considerably 0 0.0
Total 22 100.0

 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 2 9.1
Remained basically unchanged 20 90.9
Eased somewhat 0 0.0
Eased considerably 0 0.0
Total 22 100.0
 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 0 0.0
Remained basically unchanged 22 100.0
Eased somewhat 0 0.0
Eased considerably 0 0.0
Total 22 100.0
 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 0 0.0
Remained basically unchanged 20 100.0
Eased somewhat 0 0.0
Eased considerably 0 0.0
Total 20 100.0

3. If your bank has tightened or eased its credit standards or its terms for C&I loans or credit lines over the past three months (as described in questions 1 and 2), how important have been the following possible reasons for the change?

 All Respondents
BanksPercent
Not important 8 100.0
Somewhat important 0 0.0
Very important 0 0.0
Total 8 100.0
 All Respondents
BanksPercent
Not important 3 37.5
Somewhat important 5 62.5
Very important 0 0.0
Total 8 100.0
 All Respondents
BanksPercent
Not important 2 25.0
Somewhat important 0 0.0
Very important 6 75.0
Total 8 100.0

 All Respondents
BanksPercent
Not important 8 100.0
Somewhat important 0 0.0
Very important 0 0.0
Total 8 100.0
 All Respondents
BanksPercent
Not important 2 25.0
Somewhat important 6 75.0
Very important 0 0.0
Total 8 100.0
 All Respondents
BanksPercent
Not important 4 50.0
Somewhat important 4 50.0
Very important 0 0.0
Total 8 100.0

 All Respondents
BanksPercent
Not important 8 100.0
Somewhat important 0 0.0
Very important 0 0.0
Total 8 100.0
 All Respondents
BanksPercent
Not important 6 75.0
Somewhat important 2 25.0
Very important 0 0.0
Total 8 100.0
Responses are not reported when the number of respondents is 3 or fewer.
Responses are not reported when the number of respondents is 3 or fewer.
Responses are not reported when the number of respondents is 3 or fewer.
Responses are not reported when the number of respondents is 3 or fewer.
Responses are not reported when the number of respondents is 3 or fewer.

Responses are not reported when the number of respondents is 3 or fewer.
Responses are not reported when the number of respondents is 3 or fewer.
Responses are not reported when the number of respondents is 3 or fewer.

4. Apart from normal seasonal variation, how has demand for C&I loans changed over the past three months? (Please consider only funds actually disbursed as opposed to requests for new or increased lines of credit.)

 All Respondents
BanksPercent
Substantially stronger 0 0.0
Moderately stronger 2 9.1
About the same 14 63.6
Moderately weaker 6 27.3
Substantially weaker 0 0.0
Total 22 100.0

5. If demand for C&I loans has strengthened or weakened over the past three months (as described in question 4), how important have been the following possible reasons for the change?

Responses are not reported when the number of respondents is 3 or fewer.
Responses are not reported when the number of respondents is 3 or fewer.
Responses are not reported when the number of respondents is 3 or fewer.
Responses are not reported when the number of respondents is 3 or fewer.
Responses are not reported when the number of respondents is 3 or fewer.
Responses are not reported when the number of respondents is 3 or fewer.
Responses are not reported when the number of respondents is 3 or fewer.
 All Respondents
BanksPercent
Not important 6 100.0
Somewhat important 0 0.0
Very important 0 0.0
Total 6 100.0
 All Respondents
BanksPercent
Not important 6 100.0
Somewhat important 0 0.0
Very important 0 0.0
Total 6 100.0

 All Respondents
BanksPercent
Not important 3 50.0
Somewhat important 2 33.3
Very important 1 16.7
Total 6 100.0
 All Respondents
BanksPercent
Not important 6 100.0
Somewhat important 0 0.0
Very important 0 0.0
Total 6 100.0
 All Respondents
BanksPercent
Not important 1 16.7
Somewhat important 4 66.7
Very important 1 16.7
Total 6 100.0

 All Respondents
BanksPercent
Not important 5 83.3
Somewhat important 1 16.7
Very important 0 0.0
Total 6 100.0
 All Respondents
BanksPercent
Not important 6 100.0
Somewhat important 0 0.0
Very important 0 0.0
Total 6 100.0

6. At your bank, apart from normal seasonal variation, how has the number of inquiries from potential business borrowers regarding the availability and terms of new credit lines or increases in existing lines changed over the past three months? (Please consider only inquiries for additional or increased C&I lines as opposed to the refinancing of existing loans.)

 All Respondents
BanksPercent
The number of inquiries has increased substantially 0 0.0
The number of inquiries has increased moderately 1 4.8
The number of inquiries has stayed about the same 18 85.7
The number of inquiries has decreased moderately 2 9.5
The number of inquiries has decreased substantially 0 0.0
Total 21 100.0

Over the past year, declines in oil prices may have led to strains in firms involved in oil and natural gas drilling/extraction and in the companies that provide support to those firms. Question 7 asks you to indicate what fraction of C&I loans held on your bank's books were made to firms in the oil and natural gas drilling/extraction sector. Question 8 asks about your outlook for delinquencies and charge-offs on such loans. Question 9 asks about changes in lending policies made by your bank in response to developments in the oil and natural gas drilling/extraction sector. Question asks about possible spillover effects from declines in energy commodity prices and associated declines in energy sector activities to other loan types.

7. Approximately what fraction of C&I loans currently outstanding on your bank's books were made to firms in the oil and natural gas drilling/extraction sector?

 All Respondents
BanksPercent
More than 20 percent 1 5.0
More than 10 percent but less than 20 percent 7 35.0
More than 5 percent but less than 10 percent 8 40.0
More than 1 percent but less than 5 percent 4 20.0
Less than 1 percent 0 0.0
Total 20 100.0

8. Assuming that economic activity progresses in line with consensus forecasts, and energy commodity prices evolve in line with current futures prices, what is your outlook for delinquencies and charge-offs on your bank's existing loans to firms in the oil and natural gas drilling/extraction sector over the remainder of 2016?

 All Respondents
BanksPercent
Loan quality is likely to improve substantially 0 0.0
Loan quality is likely to improve somewhat 0 0.0
Loan quality is likely to remain around current levels 6 30.0
Loan quality is likely to deteriorate somewhat 13 65.0
Loan quality is likely to deteriorate substantially 1 5.0
Total 20 100.0

9. Please indicate how important each of the following actions have been in your bank's efforts to mitigate risks of loan losses from loans made to firms in the oil and natural gas drilling/extraction sector over the past year.

 All Respondents
BanksPercent
Not important 2 10.0
Somewhat important 6 30.0
Very important 12 60.0
Total 20 100.0

 All Respondents
BanksPercent
Not important 8 42.1
Somewhat important 8 42.1
Very important 3 15.8
Total 19 100.0
 All Respondents
BanksPercent
Not important 4 21.1
Somewhat important 5 26.3
Very important 10 52.6
Total 19 100.0
 All Respondents
BanksPercent
Not important 3 15.0
Somewhat important 6 30.0
Very important 11 55.0
Total 20 100.0

 All Respondents
BanksPercent
Not important 6 30.0
Somewhat important 8 40.0
Very important 6 30.0
Total 20 100.0
 All Respondents
BanksPercent
Not important 8 40.0
Somewhat important 9 45.0
Very important 3 15.0
Total 20 100.0
 All Respondents
BanksPercent
Not important 9 47.4
Somewhat important 9 47.4
Very important 1 5.3
Total 19 100.0

 All Respondents
BanksPercent
Not important 7 50.0
Somewhat important 3 21.4
Very important 4 28.6
Total 14 100.0

Questions 10-11 ask about commercial real estate (CRE) loans at your bank, including construction and land development loans and loans secured by nonfarm nonresidential real estate. Question 10 deals with changes in your bank's standards over the past three months. Question 11 deals with changes in demand. If your bank's lending standards or terms have not changed over the relevant period, please report them as unchanged even if they are either restrictive or accommodative relative to longer-term norms. If your bank's standards or terms have tightened or eased over the relevant period, please so report them regardless of how they stand relative to longer-term norms. Also, please report changes in enforcement of existing standards as changes in standards.

10. Over the past three months, how have your bank's credit standards for approving applications for CRE loans changed?

 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 1 7.1
Remained basically unchanged 13 92.9
Eased somewhat 0 0.0
Eased considerably 0 0.0
Total 14 100.0

11. Apart from normal seasonal variation, how has demand for CRE loans changed over the past three months?

 All Respondents
BanksPercent
Substantially stronger 0 0.0
Moderately stronger 1 7.1
About the same 8 57.1
Moderately weaker 4 28.6
Substantially weaker 1 7.1
Total 14 100.0

Questions 12-13 ask about how your bank has changed its lending policies on CRE loans over the past year.

12. Over the past year, how has your bank changed the following policies on CRE loans?

 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 0 0.0
Remained basically unchanged 13 92.9
Eased somewhat 1 7.1
Eased considerably 0 0.0
Total 14 100.0
 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 0 0.0
Remained basically unchanged 14 100.0
Eased somewhat 0 0.0
Eased considerably 0 0.0
Total 14 100.0

 All Respondents
BanksPercent
Tightened considerably 1 7.1
Tightened somewhat 2 14.3
Remained basically unchanged 8 57.1
Eased somewhat 3 21.4
Eased considerably 0 0.0
Total 14 100.0
 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 1 7.1
Remained basically unchanged 13 92.9
Eased somewhat 0 0.0
Eased considerably 0 0.0
Total 14 100.0

 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 1 7.1
Remained basically unchanged 13 92.9
Eased somewhat 0 0.0
Eased considerably 0 0.0
Total 14 100.0
 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 0 0.0
Remained basically unchanged 14 100.0
Eased somewhat 0 0.0
Eased considerably 0 0.0
Total 14 100.0

 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 1 7.1
Remained basically unchanged 13 92.9
Eased somewhat 0 0.0
Eased considerably 0 0.0
Total 14 100.0

13. If your bank has tightened or eased its credit policies on CRE loans over the past year (as described in question 12), please select the 4 most important reasons among all the possible reasons listed below and rank them in order of importance. (Please respond to either A, B, or both as appropriate and rank the 4 most important reasons using a scale ranging from 4=the most important to 1=the least important.)

Responses are not reported when the number of respondents is 3 or fewer.
Responses are not reported when the number of respondents is 3 or fewer.

Yields on commercial mortgage-backed securities (CMBS) have increased considerably over the last six months. At the same time, outstanding CRE loans held on banks' books have continued to grow robustly in aggregate, according to the Federal Reserve's weekly H.8 statistical release, "Assets and Liabilities of Commercial Banks in the United States." Questions 14-18 ask how your bank's lending policies and practices regarding CRE loans have been affected by recent conditions in the CMBS market and by activities of nonbank financial institutions.

14. How have conditions in the CMBS market affected the volume of CRE loan originations by your bank over the past six months?

 All Respondents
BanksPercent
Led to a substantial decrease 3 27.3
Led to a moderate decrease 1 9.1
Led to no change 7 63.6
Led to a moderate increase 0 0.0
Led to a substantial increase 0 0.0
Total 11 100.0

15. How have conditions in the CMBS market affected the volume of CRE loan securitizations by your bank over the past six months?

 All Respondents
BanksPercent
Led to a substantial decrease 2 22.2
Led to a moderate decrease 3 33.3
Led to no change 4 44.4
Led to a moderate increase 0 0.0
Led to a substantial increase 0 0.0
Total 9 100.0

16. Apart from normal seasonal variation, how has demand for loans or lines of credit from nonbank financial institutions, used to fund their CRE loan pipelines prior to securitization, changed over the past six months? (Please consider the number of requests for new spot loans, for disbursement of funds under existing loan commitments, and for new or increased credit lines.)

 All Respondents
BanksPercent
Substantially stronger 0 0.0
Somewhat stronger 0 0.0
About the same 3 50.0
Somewhat weaker 1 16.7
Substantially weaker 2 33.3
Total 6 100.0

17. How have your bank’s credit standards for approving applications for loans or lines of credit to nonbank financial institutions, used to fund their CRE loan pipelines prior to securitization, changed over the past six months? (Please consider applications for new spot loans, and for new or increased credit lines.)

 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 2 33.3
Remained basically unchanged 4 66.7
Eased somewhat 0 0.0
Eased considerably 0 0.0
Total 6 100.0

18. In the next six months, a large amount of CRE loans originated in 2006 and currently held in CMBS will need to be refinanced. Assuming economic activity progresses in line with consensus forecasts, how are the standards that your bank would apply to such CRE loans different from those that you expect to apply to other CRE loans?

 All Respondents
BanksPercent
Considerably tighter 0 0.0
Somewhat tighter 3 25.0
About the same 9 75.0
Somewhat easier 0 0.0
Considerably easier 0 0.0
Total 12 100.0

1. As of December 31, 2015, the 22 respondents had combined assets of $1.2 trillion, compared to $2.3 trillion for all foreign related banking institutions in the United States. The sample is selected from among the largest foreign-related banking institutions in those Federal Reserve Districts where such institutions are common.

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