German banks have capital but find few good borrowers, Bundesbank says

German banks have excess capital, but lending remains weak because demand from creditworthy borrowers is limited and the outlook is clouded by the Iran war. The Bundesbank’s chief supervisor said uncertainty is discouraging banks from deploying capital into companies and households. The message is a mild negative for German credit growth and bank earnings prospects, but it is more commentary than a market-moving event.

Analysis

German banks have excess capital, but lending remains weak because demand from creditworthy borrowers is limited and the outlook is clouded by the Iran war. The Bundesbank’s chief supervisor said uncertainty is discouraging banks from deploying capital into companies and households. The message is a mild negative for German credit growth and bank earnings prospects, but it is more commentary than a market-moving event.