Senior Loan Officer Survey—First Quarter of 2019

Results of the First-Quarter Survey | Vol. 12.1 | April 15, 2019

This Senior Loan Officer Survey (SLOS) focused on changes to lending practices in the first quarter of 2019. The survey was conducted between February 4 and March 8, 2019.

Household lending conditions

  • Both mortgage and non-mortgage lending conditions are largely unchanged (Chart 1). This follows a period of tightening over 2017 and early 2018 that was driven by regulatory changes in the mortgage market.1
  • Price and non-price household lending conditions were broadly unchanged (Chart 2 and Chart 3).2
  • Demand decreased for all types of household borrowing, reflecting higher interest rates (contributing to, for example, a slowdown in the housing market), softer economic and labour market conditions, and lower consumer confidence.
  • Demand for household borrowing is expected to continue to decrease next quarter, driven mainly by low-ratio mortgages and home equity lines of credit. Lower housing market activity, uncertainty over rising interest rates, and a potential slowdown in the Canadian economy were the main reasons given.

Chart 1: Household lending conditions are largely unchanged

* 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.

Note: Each series shows the average of the balances of opinion for the price and non-price dimensions of lending conditions for each category of lending.

Last observation:

Chart 2: Price and non-price mortgage lending conditions were unchanged

* 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 high-ratio mortgages, low-ratio mortgages and home equity lines of credit.

Last observation:

Chart 3: Price and non-price non-mortgage lending conditions were unchanged

* 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 auto loans and other consumer lending. Last observation:

Business lending conditions

  • Overall business lending conditions were close to unchanged this quarter, with the balance of opinion rising from -16 to -3 per cent compared with last quarter (Chart 4).
  • Price lending conditions eased marginally, while non-price conditions were unchanged (Chart 5).
  • The main driver behind the slight price easing was corporate lending conditions.3 Although competition continues to drive corporate easing, the easing has become much less widespread.
  • Concerns about the energy sector in Alberta have also led to a tightening of lending conditions in the region for small and commercial businesses.
  • Respondents reported that demand for credit was mostly unchanged this quarter (aside from a slight increase from commercial borrowers), following five consecutive quarterly increases.
  • Increased volatility in late 2018 and early 2019 resulted in reduced access to capital markets for borrowers of all risk grades (particularly non-investment grade). The latter half of the first quarter of 2019 saw a turnaround, however, with spreads coming back down.

Chart 4: Overall business lending conditions were close to unchanged

* 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.

Note: The chart shows the average of the balances of opinion for the price and non-price dimensions of lending conditions. Last observation:

Chart 5: Price lending conditions eased marginally, while non-price conditions were unchanged

* 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. Last observation:


  1. 1. Note that the balance of opinion suggests only the direction of the net change in lending conditions; it does not provide information on the magnitude of the change.[]
  2. 2. The pricing of credit is defined as spreads over base rates, rather than as the level of rates. Non-price conditions include terms of credit (collateral, covenants, etc.), general standards and capital allocation limits.[]
  3. 3. Corporate, commercial and small business borrowers are differentiated by the size of the loans authorized. See U. Faruqui, P. Gilbert and W. Kei, “The Bank of Canada’s Senior Loan Officer Survey (Box 2)” (Ottawa: Bank of Canada, 2011).[]