Budapest, 22 May 2025 – Despite the unfolding tariff war and uncertain international environment, the Hungarian banking system had remained stable, resilient and capable of supporting an expansion in lending, Mihály Varga said in his presentation at the Portfolio Lending 2025 conference. The central bank governor emphasised that the MNB would initiate consultations with banks in order to significantly boost corporate lending and lower cash flow burdens.
In his presentation, Governor Varga pointed out that the profitability of the domestic banking sector remained outstanding in 2024, with the capital adequacy ratio and liquidity ratio also indicating stable performance. As he said, the banking system’s lending capacity was at an all-time high, and household lending was also showing significant growth, but corporate investment lending had yet to pick up. While maintaining the stability of the banking system, the MNB was ready to work with the banking sector to stimulate lending activity, with a particular focus on the SME sector, and to reduce household and corporate cash flow costs, said Varga. As he noted, one of the first steps was the agreement concluded with the Hungarian Banking Association in April, which set out the direction for reducing household fees; at the same time, the MNB intended to reach another agreement in June with a view to increasing corporate lending.
Speaking about the state of the Hungarian economy, the Governor of the Magyar Nemzeti Bank pointed out that uncertainties in global trade and the global impact of rising US yields could have a significant effect on Europe, including Hungary. Although the global economy was struggling with the dual problems of slowdown and sticky inflation, Hungary had reason to be optimistic as Hungarian economic fundamentals were strong, with the country’s balance indicators improving in recent years and the external position remaining robust, as he emphasised. Varga went on to say that, while Hungarian GDP growth remained moderate for the time being, burgeoning consumption and persistently high employment levels were reinforcing the positive expectations. It was also evident that inflation had continued to decline in recent months, but the fight against rising prices was not over yet, said the Governor, adding that the MNB would continue to pay close attention to anchoring inflation expectations.