Banks tightening loan criteria

A UBS survey of the chief financial officers of the banks shows they are raising the bar for borrowing, even though demand for loans remains weak, as they fret over the ability of SME to maintain their loan repayments.

UBS analyst Jonathon Mott says it is the first time banks have started tightening in credit since early 2010.

Print businesses are among those facing the toughest lending criteria as banks look to insulate themselves from potential bad debt.

Overall demand for loans is expected to grow by five per cent over the next 12 months, a low level compared with historic levels.

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