Italian corporate lending rises 3.2% in June as demand strengthens

Italian corporate bank lending increased 3.2% year-on-year in June, the Bank of Italy reported on Thursday, marking the highest growth rate since early 2023. The expansion follows a period of subdued credit demand and tighter financing conditions across the eurozone.

The data, published as part of the central bank’s monthly lending survey, reflects a gradual pickup in business borrowing, particularly among small and medium-sized enterprises. Analysts attribute the rise to improving economic sentiment, reduced energy cost pressures, and the European Central Bank’s recent policy adjustments aimed at supporting credit flows.

Italian banks have also reported easing lending standards in recent months, with demand for loans driven by working capital needs and investment in digital transformation. However, credit growth remains uneven across sectors, with construction and services leading the rebound while industrial firms continue to face cautious lending practices.

The Bank of Italy’s figures come as the ECB prepares to review its monetary policy stance amid mixed signals on inflation and growth in the bloc. While the June lending data suggests a stabilization in credit markets, policymakers remain vigilant over the sustainability of the recovery amid persistent geopolitical risks and structural challenges in Italy’s banking sector.

The central bank did not provide a breakdown of loan volumes by sector or borrower size, but the overall trend aligns with broader eurozone trends where corporate lending has shown signs of stabilization after a prolonged slowdown.