Budapest, 3 August 2023 — Based on the banks’ responses to the Lending Survey conducted in July 2023, credit institutions left conditions on commercial real estate loans and corporate loans broadly unchanged in 2023 Q2, with no changes planned for the next six months. In the corporate sector, credit demand continued to shift towards short-term and foreign currency loans; however, some respondent banks expect a pick-up in demand for long-term loans in 2023 H2. Within commercial real estate loans, the only area where banks saw a pick-up in demand was for financing logistics centres; and, looking ahead, they expect this to continue. Overall, banks left conditions on housing and consumer loans unchanged, although they planned to tighten terms for home equity loans over the next six months. The respondent banks saw a decline in demand for housing loans and an increase in demand for consumer loans during the quarter; however, some banks expect demand to increase in both segments in H2.
The Magyar Nemzeti Bank conducts a questionnaire-based survey in each quarter among the senior loan officers of domestic banks to report on current changes in credit demand and credit supply. Banks’ senior loan officers responded to the MNB’s second quarter Lending Survey between 1 and 18 July 2023.
Based on the responses to the Lending Survey, banks generally left corporate credit conditions unchanged in 2023 Q2 in all corporate size categories. However, a net 22 per cent of respondents pointed to the uncertain economic outlook and industry-specific problems as reasons for raising spreads for larger companies. Banks do not plan to modify corporate credit standards significantly in 2023 H2, but a net 28 per cent of them plan to increase the premium on higher-risk loans due to changing risk tolerance. Capital and liquidity position did not entail the tightening of conditions at any of the respondent banks, which continues to indicate ample lending capacity.
A net 14 per cent of the banks reported a pick-up in loan demand in the corporate segment in 2023 Q2. Here, the share of foreign currency loans was slightly higher than that of HUF loans. Although at a slowing pace, the decline in demand for long-term loans continued as seen in previous quarters, and 65 per cent of the banks perceived increasing demand for short-term corporate loans in 2023 Q2. A net 27 per cent of the banks expect demand for corporate loans to grow in the next six months, and a net 12 per cent anticipate an increase in demand for long-term loans.
In 2023 Q2, banks also left standards for commercial real estate loans unchanged, with no plans of modifications looking ahead, and only 9 per cent of the banks would tighten financing conditions on housing projects and office buildings. In the second quarter, a net 32 per cent of the respondent banks reported decline in demand for housing project loans, while a net 31 per cent in the case of logistics centres reported increasing demand. In the third and fourth quarters, 24 per cent of the banks expect a fall in demand for commercial real estate loans, excluding logistics centres.
Overall, conditions on housing loans disbursed in 2023 Q2 did not change compared to the previous quarter; however, considering the changes in sub-conditions, a net 41 per cent of the banks raised the minimum level of creditworthiness and spreads. Looking ahead, banks do not intend to make any significant changes on housing loan standards. Fifteen per cent of the banks surveyed perceived a decline in demand for housing loans, however, 69 per cent of them anticipating a pick-up in demand in the second half of the year.
Overall, banks did not change their standards on consumer loans in 2023 Q2; however, in the case of home equity loans, a net 13 per cent of them tightened the minimum level of creditworthiness. Looking ahead, a net 11 per cent of the banks considered tightening conditions, and a net 20 per cent planned tightening with regards to secured consumer loans. Nearly all the institutions reported increasing demand for consumer loans and only a net 10 per cent expect further growth in demand in this market over the next six months.
In the Lending Survey, we use the so-called net change indicator, expressed as a percentage of respondents, to indicate changes. This indicator is calculated as follows: market share-weighted ratio of respondents projecting a change (tightening/increasing/strengthening) minus the market share-weighted ratio of respondents projecting a change in the opposite direction (easing/decreasing/weakening).
The detailed findings of the Lending Survey and the set of charts are available on the MNB’s website at: