April 7 (Reuters) - Bank loans to companies in Italy
declined sharply between November and February as demand
weakened and interest rates rose, the Bank of Italy said on
Friday.
In the three months to February loans to the non-financial
sector fell overall by 3.2% year-on-year, driven down by 7.5%
drop in credit to companies, the Bank of Italy said in its
quarterly bulletin.
The contraction in lending to firms "reflects a broad
weakening in all sectors, and in particular the service sector,"
the bulletin said, citing higher funding costs for banks and
more stringent lending criteria.
Between November and February the average interest rate on
new bank loans to firms increased by 60 basis points (0.6%) to
3.6%, the central bank said.
Loans to families in the three months to February edged down
by 0.1% year-on-year, as demand for house mortgages declined, it
added.
The bulletin also estimated that the Italian economy
probably posted "slight growth" in the first quarter of this
year compared with the previous three months, after shrinking
0.1% at the end of last year.
Statistics bureau ISTAT will issue a flash estimate of first
quarter gross domestic product on April 28.
(Reporting by Alberto Chiumento, Luca Fratangelo, editing by
Gavin Jones and)
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