Credit tougher for Chile companies in Q4

SANTIAGO: Credit conditions in Chile for most companies and for homebuyers became more restrictive in the fourth quarter of 2011, Chile's central bank said on Wednesday, as the economy slows with the global economy and on the back of Europe's debt crisis.

However banks reported that demand for credit by both consumers and companies remained stable during the period, the central bank said in a report.

"In the case of commercial loans, there was a more restrictive offering for most companies, with the exception of those linked to real estate," the report said. "In general, demand for personal and business credit did not show signs of weakening."

"The conditions for financing offers for individuals stayed stable for consumer credit while there was a more restrictive offer for the financing of housing," the report added.

Loan approval standards also became more restrictive during the quarter for all kinds of companies, irrespective of size, the report said, likely reflecting higher risk premiums and guarantees and expectations for a more complex economic scenario in 2012.

Chile's central bank last month cut its 2012 growth and  inflation outlook, citing Europe's financial crisis.

The bank now sees the economy expanding between 3.75 percent and 4.75 percent in 2012, compared with a previous outlook for growth of 4.25 percent to 5.25 percent.

Price pressures spiked in December, but are seen easing in January.

Chilean inflation surged more than expected in December on transportion and food costs, boosting views the central bank will now hold its key rate steady at 5.25 percent for a seventh month running on Thursday rather than cut it as many had previously expected.

Copyright Reuters, 2012