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Corporate lending stock falls on FX repayments, stronger forint

Telco

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Corporate lending stock of Hungarian banks dropped slightly in April as FX loan repayments and revaluations more than offset borrowing in forints and issues of corporate bonds, fresh data from the National Bank of Hungary (MNB) show, according to Hungarian news agency MTI.

Excluding revaluation and other effects on volumes, companies repaid net HUF 8.8 billion in April. In March, they were net borrowers of an unusually high HUF 120.9 bln, including HUF 90 bln in foreign currency. 

On a seasonally adjusted basis, companies remained net borrowers for the second month in a row in April, although net borrowing dropped to HUF 12.9 bln from nearly HUF 140 bln in the previous month. 

Typically, Hungarian companies have been net lenders, borrowing in forints and repaying FX loans in the past few years.  

Including bonds, the corporate lending stock of banks fell HUF 16.2 bln in a month to HUF 6.013 trillion at the end of April, according to unadjusted data. Net borrowing came to HUF 12.5 bln, while revaluations and other changes – mainly the stronger forint – cut the stock by HUF 28.7 bln. 

Transactions alone raised forint loan stock by HUF 38.2 bln and reduced FX loans by HUF 47 bln in April. 

Overall, the stock of forint loans grew by HUF 34.4 bln to HUF 3.343 tln and that of foreign currency loans fell by HUF 71.8 bln to HUF 2.615 tln.  

Banksʼ holdings of corporate bonds of non-financial companies rose HUF 21.1 bln to HUF 33.6 bln entirely because of new issues. 

Corporate deposits increased by HUF 25.5 bln to HUF 5.695 tln. transactions raised the deposits by HUF 40.8 bln and revaluations reduced these by HUF 13.2 bln. 

Based on transactions, companies withdrew net HUF 87 bln from forint deposits and increased their foreign currency deposits by HUF 127.7 bln. 

The forint was 0.8% stronger against the euro at the end of April compared to one month earlier. 

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