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Latest senior loan officer survey indicates stronger demand for CRE loans

U.S. domestic banks' lending standards for both commercial-and-industrialloans and commercial real estate loans were tighter, on balance, over the firstquarter, according to the Federal Reserve's April 2016 senior loan officer opinionsurvey on bank lending practices.

The survey, which covered 70 domestic banks and 22 U.S. branchesand agencies of foreign banks, indicated that CRE loans saw stronger demand duringthe covered period while demand for C&I loans was weaker. In addition, on balance,both domestic and foreign banks said that they are taking the necessary steps tomitigate the risk of loan losses in the face of the expected deterioration of delinquencyand charge-off rates on C&I loans.

Meanwhile, banks reported eased lending standards for householdson most types of residential real estate mortgage loans, which also saw strongerdemand over the first quarter. Some banks also reported easing lending standardsfor credit cards and other consumer loans, while auto loan standards were more orless unaffected.

In the survey, respondents also said that there was some deteriorationin the credit quality of loans in energy sector-dependent regions made to businessesand households.