EU Corp. Credit Watch July: N/S Gap Increasing
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We have just taken a look at Corporate Loan Growth for July in the Eurozone using our proprietary EU Credit Benchmark Model®. Our main findings include:
– Eurozone corporate loan growth at -2.3% yoy in July unchanged vs. June
– The relatively strong yoy growth improvement of June did thus not continue
– Shorter term growth rates (3m/6m) deteriorated strongly in July vs. June, this could be first signs of geopolitical tensions negatively impacting corporate loan growth, but also due to monthly volalitility or seasonality, sluggish Q2 Eurozone GDP growth might also have played a role
– The growth gap between North+ and PIIGS countries has increased again to 8.0% (based on yoy loan growth) from 7.6% in the previous month. This is just a liitle below the May 2013 high of 9.3%. In other words, there is hardly any evidence for the N/S gap to improve: ‚Big Bertha is Not Yet Firing!‘
– PIIGS (Portugal, Ireland, Italy, Greece, Spain) corporate loans are down EUR123bn or 6.4% pa
– We will closely monitor how recent geopolitical woes impact (GDP and) corporate loan growth and the N/S growth gap in the months to come
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