Europe's battered financial sector is showing further signs of healing and conditions for bank loans are stabilising while demand for loans is picking up, a key ECB survey showed today. 

Consumers are showing more appetite for buying homes and consumer goods on credit, and loans are more easily available, the data showed.

The European Central Bank said that its quarterly bank lending survey "confirmed the stabilisation in bank credit conditions for euro area enterprises and households."

A note from the Irish Central Bank said that loan demand increased from overall enterprises and from SMEs.

It added that credit standards for both loans for house purchases and consumer credit and other lending were unchanged in the first three months of 2014.

It said that access to retail funding was also unchanged, while an easing in market access was reported in respect of wholesale funding.

In today's report, the ECB said that credit standards on loans to businesses "remained broadly unchanged in the first quarter of 2014. And for loans to households, credit standards were eased in net terms".

"Across all loan categories, the net tightening of credit standards in the first quarter of 2014 remained well below historical averages calculated over the period since the start of the survey in 2003," the ECB said.

And looking ahead, credit standards were expect to ease in the second quarter," the ECB continued.

At the same time, net loan demand "turned positive for all loan categories in the first quarter," the survey showed.

The net demand for loans to businesses increased in the first quarter of 2014, "making it positive for the first time since the second quarter of 2011." 

For housing loans, "banks indicated a considerable net increase in demand, bringing it markedly above its historical average.

The net demand for consumer credit also increased, standing above its historical average," the survey found.

"Looking ahead, banks expect in net terms an increase in demand across all loan categories for the second quarter of 2014," the ECB added.