Washington, D.C., May 1, 2014 - Bank lending conditions in emerging economies deteriorated in 2014Q1, according to the latest Emerging Markets Bank Lending Conditions Survey from the Institute of International Finance.

The composite index of the IIF's Survey declined 1.2 points to 48.2 in 2014Q1.

The deterioration reflected mainly weaker economic performance, as demand for loans declined, trade finance slowed, and the number of nonperforming loans (NPLs) rose.

Banks continued to tighten credit standards for loans at about the same pace as in the previous quarter, as funding conditions were little changed, despite the market volatility across many emerging markets at the start of the year.

Regional Highlights:

The deterioration in bank lending conditions was led by Emerging Europe and Latin America. Lending conditions in Emerging Asia were tightened at the same pace as in 2013Q4, while those in Africa and the Middle East continued to ease.

Non-performing Loans:

IIF also asked survey participants how changes in exchange rates and/or interest rates related to recent market stresses were likely to affect NPLs from businesses and households at their bank going forward.

The results showed that emerging market volatility is likely to raise corporate NPLs significantly going forward.

For the Q1 Survey, 125 banks from emerging markets participated: 29 from Emerging Europe, 29 from Latin America, 19 from Emerging Asia, 34 from the Middle East/North Africa and 14 from Sub-Saharan Africa.

For more information on the Survey, visit http://www.iif.com/emr/global/emls/.

The Institute of International Finance is the global association for the financial industry, with close to 500 members from 70 countries. Its mission is to support the financial industry in the prudent management of risks; to develop sound industry practices; and to advocate for regulatory, financial and economic policies that are in the broad interests of its members and foster global financial stability and sustainable economic growth. Within its membership IIF counts leading global banks, insurers, pension funds, asset managers and sovereign wealth funds, as well as leading law firms and consultancies. For more information visit www.iif.com.