In 2014 Q2 the credit institution sector’s corporate loan portfolio increased by HUF 43 billion, based on transactional data. Disbursements exceeded repayments in the case of both forint and foreign currency loans. The positive quarterly data contributed significantly to sustaining the improving trend in corporate lending seen since 2013 Q3. Corporate lending dynamics exhibited a clearly improving trend compared to previous years, driven largely by the Funding for Growth Scheme and the low interest rate environment resulting from policy rate cuts. In annual terms, SME loans increased by 1.2 per cent, while the overall corporate loan portfolio expanded by just over 0 per cent. The new business volume contracted in the context of the FGS amounted to HUF 131 billion in Q2, and total lending since the launch of the scheme has reached HUF 1 trillion. Ninety-eight per cent of the HUF 325 billion granted during the second phase consists of new loans, with investment loans (and new lease transactions) accounting for 61 per cent of this. In respect of market based loan contracts, credit conditions remain tight, and banks did not report any easing in Q2. The financing costs of concluded loans declined in Q2 and the spread over the reference interest rate also fell in most sub-segments.

Household loans outstanding in the whole credit institution sector continued to shrink – by HUF 61 billion – as a result of contraction in the foreign currency loan portfolio, while the HUF loan portfolio increased on a transactional basis. The latter results from the significant rise in the volume of new lending. Based on transactions, the annual rate of decline in the stock of household lending was 4.9 per cent at the end of the quarter, reflecting an almost 10 per cent decline in foreign currency lending and a 1.3 per cent increase in forint lending. In net terms, over one-third of banks reported easing in lending standards on housing loans and unsecured consumer credit in the lending survey. Average spreads on new housing loans remained on the downward trend seen in the past three quarters, but the spread still exceeds the regional average by 2 percentage points.

The objective of the publication ‘Trends in Lending’ is to present a detailed picture of the latest trends in lending and to facilitate appropriate interpretation of these developments. To this end, it elaborates on the developments in credit aggregates, demand for loans perceived by banks and credit conditions, based on the Lending Survey, and the balance sheet and interest rate statistics of the banking system. Detailed results and the figures of the Lending Survey are available on the MNB’s website at the following link: