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MNB: Households make net repayments in October

Telco

Retail lending stock of Hungarian banks fell by HUF 27.4 billion in October to HUF 6.002 trillion at the end of the month mainly on continued net repayments, fresh data from the National Bank of Hungary show.

Households have been net repayers of loans practically every month since the end of 2009 as borrowing in forint, if any, failed to compensate FX-denominated loan repayments which had started with the weakening of the forint.

Households made HUF 16.2 bln of repayments on forint loans and HUF 4.1 bln of repayments on FX-denominated loans. Revaluation and other changes reduced their loan stock by a further HUF 7 bln.

Retail forint lending stock fell to HUF 5.821 tln and the stock of retail FX loans dropped to HUF 181 bln by the end of October.

The stock of Hungarian householdsʼ FX loans fell by more than HUF 3.4 tln in March as Hungary implemented a conversion of householdsʼ foreign currency mortgages to the tune of close to HUF 3 tln. At the same time the stock of forint loans rose, but the rise was nearly HUF 700 bln less: Only HUF 2.7 tln due to the refunds banks had to make to clients in compensation of past practices under legislation passed in 2014. Most of the remaining FX loans will also disappear as Parliament passed legislation on their conversion in September.

After withdrawals in October, retail deposits rose HUF 42.2 bln to HUF 6.755 tln in October as households placed HUF 35.1 bln in forint deposits and HUF 7 bln in FX deposits. Revaluations and other changes reduced the overall stock by HUF 5 bln.

Forint deposits reached HUF 5.81 tln and foreign currency deposits stood at HUF 981.5 bln at the end of last month.

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