In March 2015, the Eurosystem started its large-scale asset purchase programme (quantitative easing, QE). The asset purchases induced a rapid and strong increase in excess reserves, implying a structural liquidity surplus in the euro area banking sector. Developing a theoretical model, we show that increasing excess reserves have no or even a contractionary impact on bank loan supply. As the newly created excess reserves are heterogeneously distributed across euro area countries, the impact of QE on bank loan supply may differ across countries. Moreover, we derive implications for monetary policy implementation when the banking sector operates under a structural liquidity surplus. Increases in the central bank's main refinancing rate as well as in the minimum reserve ratio and decreases in the central bank's deposit rate develop expansionary effects on loan supply -- contrary to the case in which banks face a structural liquidity deficit.