BBJ: How did the macroeconomic environment impact corporate banking in the past year, and what are the key economic indicators shaping business operations in 2025?

Giacomo Volpi: The high uncertainty in the world and Hungary makes planning quite tricky for companies. The global setup can twist and turn input prices very fast if something changes in the geopolitics. At the same time, global demand is low, and we have only recently started to see some light at the end of the tunnel. On domestic grounds, the availability of subsidized programs is lower compared to previous years, and energy prices again soared at the start of 2025, which is compounded by the high interest rate environment. The change in the regulations affecting the employment of third-country workers also creates doubts for several companies. In short, in this kind of scenario, companies tend to postpone investment decisions and focus on streamlining and efficiency. These activities hardly require any lending from the banks.

We cannot ignore inflation, driven by both cost factors and expectations. The most problematic part is the question of wages. Here, we see a situation where companies feel forced to offer wage increases above their expected productivity. The situation initiates a vicious circle where companies increase prices to compensate for wage hikes, employees ask for higher wages to compensate for inflation, and the process repeats itself. This threat is also something that makes businesses conservative in their financial decisions.

BBJ: What financial products or services are in the highest demand among corporate clients, and how have these preferences shifted in recent years?

Albert Hulshof: Loan demand has moderately increased since last year, with the drivers explained by Giacomo. SME clients still prefer subsidized loans due to the beneficial interest rates. One of UniCredit Bank’s strengths, international trade financing, remains a strong client demand for 2025. Related to this, our bank was voted Hungary’s number one trade finance bank. Our clients also appreciate our digitalization efforts; for example, the popularity of our Digital Document Exchange platform is on the rise, thanks to the easy way customers can exchange documents and sign contracts.

BBJ: Given UniCredit’s presence across Europe, how does the Hungarian market compare to other countries regarding corporate banking trends and client needs?

AH: Generally speaking, client demand is no different in Hungary than in other CEE markets. I had the pleasure of working in Austria, Serbia and Croatia before coming to Hungary two and a half years ago, and clients in all markets value a stable banking partner that innovates and puts clients at the center by offering tailored products supporting clients’ growth. What sets Hungary apart is the higher share of subsidized lending. Also, the relative number of foreign-owned companies with production facilities in Hungary is higher than in some other markets I worked in before.

BBJ: What are some of the biggest financing challenges businesses in key sectors currently face, and how is UniCredit Bank supporting them?

GV: In general, there is, as mentioned, heightened uncertainty in the market, which puts a drag on investments. Our bank supports its clients with tailored advice and innovative solutions to weather the current situation and support companies’ growth plans in Hungary and when expanding abroad. Our obsession is to deliver excellent customer service and be a long-term partner of trust.

AH: UniCredit Bank is a major player in renewable project finance and has significantly increased its relevant portfolio in past years. Presently, the market is transitioning towards merchant- and Power Purchase Agreement-based financing structures. In this area, we can leverage our group’s expertise; for example, other markets have financed renewable energy projects with longer-term PPAs. Such projects are frequently combined with energy storage investments, where we see considerable potential.

In commercial real estate, the challenges are the changing demand on the back of working from home, increased vacancy rates, higher financing costs due to increased Euribor levels, as well as transitioning to meet ESG requirements. On the other hand, there is robust traction in residential real estate again after years of hardly any new investment decisions. As one of the major real estate lenders in Hungary, UniCredit Bank remains a reliable partner that supports clients with tailor-made solutions leveraging the expertise of our dedicated team.

The agri-food industry faces multiple challenges due to the need to adapt to a more innovative and sustainable business model. Our bank aims to facilitate the green transition of the industry and supports sustainability-oriented investments with tailor-made financing structures. These developments are pivotal to conserving biodiversity, pursuing food security and contributing to the long-term financial stability of our customers.

BBJ: Which industries have shown the most dynamic growth in corporate financing, and what factors drive their expansion?

AH: One promising growth sector is renewable energy, both globally and locally, as well as within UniCredit Bank’s portfolio. We provided HUF 92 billion in new solar park financing in 2024 alone. In the future, we also expect the demand for green transition financing to be a catalyst for loan market growth in various sectors.

Locally, IT and communications, real estate and accommodation, and metalworking industries have shown accelerated financing demand over the last years, which UniCredit Bank has supported. There were some outstanding and unique transactions as well, like Budapest Airport, where our bank participated.

As for the future, we expect a continued growth path for these sectors and forecast that the tourism, agri, residential, and defense industries will join as critical growth sectors for the Hungarian economy in the coming years.

This article was first published in the Budapest Business Journal print issue of April 22, 2025.