ABN Amro Says Expected ECB Rate Hikes Unlikely to Hurt Lending Growth

BY COMFORT OGBONNA

ABN AMRO Bank N.V. does not expect anticipated interest rate increases from the European Central Bank to significantly slow lending activity or drive borrowers toward private credit markets, according to Chief Executive Officer Marguerite Bérard.

Speaking during a media call on Wednesday, Bérard said the Dutch lender expects the ECB to raise interest rates by a total of 50 basis points this year before eventually beginning to reduce rates in 2027. Her comments suggest the bank believes the euro zone economy can continue absorbing moderately tighter monetary policy without major disruption to corporate borrowing activity.

ABN Amro has also revised down its economic growth forecasts for both the Netherlands and the broader euro area through 2027. The bank cited persistent inflation concerns and a weakening economic outlook as reasons for the downgrade, reflecting growing uncertainty across European markets.

Bérard noted that the bank’s outlook differs somewhat from current market expectations, which assume a longer-lasting impact from restrictive ECB monetary policy. She said ABN Amro expects geopolitical conditions to stabilize next year, potentially easing some of the economic pressure facing European businesses and consumers.

Despite concerns about slowing growth, the bank said lending activity within its corporate banking division remained strong during the first quarter. ABN Amro added approximately 1.5 billion euros to its corporate loan portfolio, indicating that businesses continue seeking financing even amid higher borrowing costs.

The comments come as Europe’s financial sector closely monitors the rapid expansion of private credit markets. In recent years, private lending firms and private debt funds have grown significantly as companies increasingly look for faster and more flexible financing alternatives outside the traditional banking system.

Private credit became particularly prominent after the 2008 Financial Crisis, when tighter banking regulations and stricter capital requirements reduced the appetite of many banks for riskier corporate lending. Since then, private debt providers have stepped in to offer financing solutions to private equity firms and medium-sized companies, often through long-term loans with simplified structures and potentially higher returns for investors.

While some analysts believe higher interest rates could encourage more companies to seek funding from private credit providers, ABN Amro currently does not see a major shift away from traditional bank lending. The lender’s continued loan growth suggests many businesses still value established banking relationships despite evolving financing options across Europe’s capital markets.