Home buyers drive credit pick-up in euro zone

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Loans to the private sector in May were up 0.5 percent on the year, a stronger result than the 0.4 percent predicted in a Reuters poll.

Sparse lending to companies has dogged the struggling euro zone economy although the picture had been improving and policy setters including ECB President Mario Draghi believe that the bloc is recovering. The latest lending figure will bolster that belief.

The M3 measure of money circulating throughout the 19 countries in the euro zone grew at the slower pace of 5.0 percent in May, the ECB said. This was lower than the 5.3 percent growth rate in April.

(Reporting By John O'Donnell; Editing by Hugh Lawson)