Debt ratio for companies declines slightly

The European Central Bank (ECB) reports that the consolidated debt ratio for non-financial enterprises was 66.1% of GDP in the second quarter of 2026, a small drop from 66.4% in the same period of the previous year. This data comes from sectoral financial accounts released on October 28, compiled in collaboration with Eurostat.

Financing growth increases for companies

Annual growth in financing for non-financial companies reached 1.7% in the second quarter, up from 1.4% in the first. Growth in financing through loans rose from 2.4% to 3.2%, and loans from monetary financial institutions increased by 4.4%, compared to 3.0% in the previous quarter.

Debt ratio and financing growth are not directly linked

The ECB explains that while the debt ratio has decreased, it does not necessarily mean that the total amount of debt has decreased. The debt ratio measures the consolidated outstanding debt relative to GDP. New financing can continue to be mobilized even as the ratio declines. The consolidated measure accounts for debts between companies within the same group, while the broader non-consolidated measure remains close to 135.9% of GDP.

Net financing capacity of companies rises

The sectoral accounts show that the net financing capacity of non-financial companies increased from 103 to 127 billion euros, cumulated over four quarters. This indicator reflects the balance between the resources available to companies and their financing needs, and does not equate to accounting profit.

Euro area investment and savings decline

Net non-financial investment in the entire euro area economy amounted to 599 billion euros over the four quarters ending in June 2026. The ECB attributes this decline to reduced net investment by non-financial companies. At the same time, net savings across all sectors fell from 895 to 868 billion euros.

Contrasting financial trends for companies

The ECB’s data show a mixed picture: companies are accessing more financing through certain instruments, yet their net investment and debt levels relative to GDP are declining. These figures are aggregated at the euro area level and do not reflect the specific conditions of individual companies.

Banks tighten lending criteria for companies

The ECB’s survey on the distribution of bank credit, released on October 27, shows that 9% of euro area banks, net balance, reported tightening their lending criteria for companies in the third quarter. The demand for loans from companies also decreased, with a net balance of -6%. This survey is based on responses from 159 banks.

Banks anticipate further tightening of lending standards

The surveyed banks expect to tighten lending criteria further in the fourth quarter, which raises concerns about future financing conditions for companies. The survey captures the intentions and conditions reported by banks, not the actual outstanding loan amounts recorded in the sectoral accounts.