Euro zone banks expect rebound in mortgage applications - ECB poll

FRANKFURT (Reuters) - Euro zone banks expect a small rebound in the demand for mortgages and loans to companies early this year as a slump in lending shows early signs of moderating, a European Central Bank survey showed on Tuesday.

The ECB's quarterly Bank Lending Survey showed lenders continued to tighten access to credit in the last quarter of last year but fewer banks did so than at any point in the last two years. The proportion was also smaller than banks themselves had expected three months earlier.

While banks expect to continue raising the bar for extending loans this quarter, they also see "a small net increase" in the demand for loans to companies and for mortgages for the first time since early 2022, the ECB said.

Furthermore, while terms and conditions tightened further on consumer credit, they eased for housing loans, the survey showed.

In corporate loans, there was "almost no net tightening in services" but this was more than offset by "relatively large net tightening in the commercial real estate, construction and residential real estate sectors".

Banks' access to funding via money markets, long-term deposits and debt securities improved as markets started expecting rate cuts from the ECB.

But short-term retail funding and securitisation tightened slightly.

(Reporting By Francesco Canepa)