Euro zone banks borrow 50.4 billion euros from ECB at 3-year auction

FRANKFURT (Reuters) - Euro zone banks borrowed 50.4 billion euros for three years from the European Central Bank at an auction on Thursday, taking advantage of a rebate-rate that will see them get paid if they maintain the size of their loan book.

The ECB said 156 banks tapped its latest Targeted Longer-Term Refinancing Operation (TLTRO), a key part of its efforts to keep credit flowing to companies and households hit by the coronavirus pandemic.

Still, the 50.4 billion figure falls well short of the record 1.3 trillion euro take up earlier this year, likely indicating that some lenders are holding back to see the new terms of the ECB's three-year credit facility later in the day.

To make room for the fresh, cheaper funding banks are set to repay 5.1 billion euros next week from a 2017 TLTRO that would have matured in March.

The ECB lent a record 1.3 trillion euros at its June TLTRO auction but demand was just 174.5 billion euros at the next round in September, in a sign that banks were now replete with cash and growing reluctant to extend fresh credit.

The ECB will announce its new stimulus package at 1245 GMT but it has already said it will mainly consist of even cheaper TLTRO and more bond purchases.

(Reporting By Francesco Canepa)