Companies News
The
Market Quotes Powered By Forexpros, the Forex, Futures, and Stock Markets Portal.
Banks increase margins even on business loans and it get expensive for businesses to borrow
Thursday, 22 March 2012
Not only
Swedish households that are facing the quarantine from borrowing,
companies are also paying more for their loans. Compared to the years
before the financial crisis, the difference between the interest rate
on new corporate loans and repo rate has doubled according, latest
media reports show.
We have talked
a lot about banks increasing their margins on mortgages. Now it turns
out that it also applies to banks' corporate loans.
The difference
between the repo rate and banks' average interest rate has increased by
one percentage point compared to how it looked in late 2008, according
to figures from the Swedish central banks and Statistic Sweden.
Those that feel
the pain most as would be imagined are mainly the small and
medium-sized businesses that are affected by interest rate increases
because larger companies often use bond markets for funding.
It is not
pretty clear if the margins on corporate loans will increase in the
future. The bank SEB highlights that the margins on business loans are
given to any other business customer in the bank, and that this is
driven by how long the relationship the company has with the bank and
the effects of local competition.
By Scancomark.se Team
What do you think about this
article or us? Please leave a comment. Thank you!