28 November 2013, Budapest - The ‘Trends in Lending’, a quarterly publication of the Magyar Nemzeti Bank, is aimed at presenting a comprehensive and descriptive analysis of indicators of trends in lending.
In 2013 Q3, loans outstanding in the corporate segment increased substantially due to new loans disbursed under the Funding for Growth Scheme. Thus, the decline in the annual growth rate moderated from 6.4 to 3.5 per cent. The new loans disbursed under the Funding for Growth Scheme also facilitated the extension of maturities and the shift toward forint-denominated loans. In Q3 the lending developments beside the FGS were also favourable, significant crowding out effect of the program could not be observed in new lending volumes. Additionally, forint lending rates - that only affects those companies who are considered to be creditable by banks but can’t take part in the FGS – have tracked the cuts in the central bank policy rate in Q3 as well, thereby contributing to the improvement of the corporate credit market.
The contraction in household loans outstanding continued, reaching an annual rate of 5.2 per cent, which is fully attributable to the decrease in foreign currency loans outstanding, while forint loans increased during the quarter. The volume of new loans moved further away from its historic low at the beginning of the year. Conditions for unsecured household loans continued to ease, while in terms of housing loans the banks reported the conditions to be unchanged. The annual percentage rate charged (APR) on actual transactions declined, in the case of housing loans, it is now approaching 9 per cent, while interest rate paid by debtors in the state interest subsidy scheme lies between 6-7 per cent. At the same time, the level of credit conditions and interest rate spread remains high.
The objective of the publication Trends in Lending is to present a detailed picture of the latest trends in lending and to facilitate the appropriate interpretation of these developments. To this end, it elaborates on the developments in credit aggregates, the demand for loans perceived by banks and credit conditions, based on the Lending Survey, balance sheet and interest rate statistics of the banking system.
MAGYAR NEMZETI BANK
The primary statutory duty of the Magyar Nemzeti Bank is to deliver and maintain price stability. The MNB ensures the safe operation of the payment and settlement systems, safeguards the financial stability of the banking sector, manages the country’s foreign currency reserves, collects and publishes statistical data, and issues the forint, Hungary’s national legal tender.