The past year was marked by the beginning of recovery of lending to companies and a reduction of interest rates. Unlike retail lending, corporate loans again began to take on a long-term growth trend. Survey measurements of the tightness of bank lending standards indicated that banks have begun to relax their criteria for loan approvals. Considering the usual positive connection between credit activity and overall economic activity, the turnaround in the trend of credit should be interpreted in connection with a halt in the downward trend of overall economic activity. It can be expected that such trends will continue throughout 2011.
However, as to date, the positive trends are related to lending to large companies. The small and medium business (SME) segment was hardest hit in this crisis, with risks escalating to such measures that banks could not risk increased lending to that segment. A survey of a sample of banks assessed that the ratio of bad loans in the SME sector reached 17.2%. However a bank survey also indicated that the start of recovery of loans to households in the segment of housing loans and loans to the SME segment can be expected in 2011 (both at rates of approximately 6%). Banks are expecting a continuation of faster growth of credit to large companies, at annual rates of about 12%.