Results of the Fourth-Quarter Survey | Vol. 10.4 | January 8, 2018
This Senior Loan Officer Survey (SLOS) focused on changes to business-lending practices in the fourth quarter of 2017. The survey was conducted between November 6 and December 1, 2017.
- Survey results suggest that overall business-lending conditions eased slightly in the fourth quarter (Chart 1),1 primarily because of easier pricing conditions (that is, lower spreads) on lending to corporate borrowers (Chart 2).2 Non-price conditions were mostly unchanged.
- This marks the first time that lending conditions have eased since the oil price shock of 2014. Price conditions last changed in the second quarter of 2017, with a slight tightening, while non-price conditions have changed little since easing in the fourth quarter of 2016.
- Competition was the main reason cited by respondents for the easing in lending conditions for corporate borrowers this quarter.
- Lending conditions for small business borrowers were unchanged.
- From a regional perspective, both price and non-price conditions eased for commercial borrowers in the Prairies as the economic activity related to the natural resource sector continues to increase.
- Demand for credit increased in the fourth quarter of 2017, after being unchanged in the third quarter.
- Access to capital markets improved for all risk grades of corporate borrowers.
Chart 1: Overall business-lending conditions
* The balance of opinion is calculated as the weighted percentage of surveyed financial institutions reporting tightened credit conditions minus the weighted percentage reporting eased credit conditions. Thus, a positive balance of opinion implies a net tightening. The chart shows the average of the balances of opinion for the price and non-price dimensions of lending conditions.
Chart 2: Price and non-price lending conditions
* The balance of opinion is calculated as the weighted percentage of surveyed financial institutions reporting tightened credit conditions minus the weighted percentage reporting eased credit conditions.
Note: Each series is the simple average of the balances of opinion for the small business, commercial and corporate sectors.