Not only is the total figure a record, but the second quarter of2004 saw the biggest ever quarterly increase since records began in1986. Total lending increased by €8.4 billion ($10.3 billion) inthe second quarter compared with €7 billion ($8.5 billion) in thefirst quarter. But the real total is believed to be more than€192.5 billion ($236 billion) because the Bank does not registerall property lending.

"There continues to be less correlation between data oninvestment activity and lending. While investment acquisitions havedropped by 12.1% in Q2 2004 compared to Q1 2004, bank lending hasincreased by 9.4% over the same period," says Barry Osilaja, vicepresident, Senior Debt and Structuring at Jones Lang LaSalleCorporate Finance.

He adds, "This increase of €8.4 billion, the highest quarterlyincrease since figures began, is most likely as a result of profittaking on the back of refinancing and valuations by investors. Weexpect a slow down in the lending figures as a result of thetightening in the debt-yield gap following recent increases in swaprates and increased activity by institutional investors."