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UPDATE - Hungarian businesses net loan repayers in December

Telco

Non-financial Hungarian companies were net repayers of both forint and foreign currency-denominated loans in December, and they withdrew more from foreign currency deposits than they placed in forint deposits, the National Bank of Hungary (MNB) said in a monthly report on Tuesday.

In real terms, Hungarian companies borrowed 7.4% less from domestic banks in December 2011 than a year earlier, with borrowing in forint dropping 4.4% and borrowing in foreign currency down 9.7% yr/yr, MNB’s data on transactions show.

Lending by domestic banks to non-financial companies has fallen steadily in real terms since February 2009. Lending in forint started to drop again in real terms in September 2011 after yr/yr rises in April-August last year. Previously, it dropped steadily in real terms between October 2008 and March 2011. Lending in foreign exchange has fallen steadily in real terms since September 2009.

Net loan repayments by the companies totalled HUF 148.9bn in December, while their net debt to domestic banks fell HUF 139.3bn due to transactions, including net bond issues worth HUF 9.7bn. Net withdrawals from deposits of HUF 22.6bn financed about 15% of the loan repayments.

The net loan repayments came after two months of net borrowing, although in seasonally adjusted terms, non-financials have been net repayers last year, except for March and April. With just a few exceptions, Hungarian non-financial companies have repaid their loans since May 2009.

December net repayments were the largest in two years, and even the seasonally adjusted figure was the largest since July 2009 as average-size forint repayments went parallel with the largest FX loan repayments since January 2011. Part of the rise in the forint-term figures could reflect the sharp weakening of the forint in December.

The December bond issues, together with a HUF 100m increase from revaluation changes, raised outstanding corporate bond stock subscribed by domestic lenders to HUF 109.1bn at the end of the month.

Companies’ forint loan stock fell HUF 92.1bn to HUF 3,128.9bn in December, as the result of HUF 79.3bn of net repayments and a HUF 12.8bn revaluation reduction.

Corporate foreign exchange loan stock dropped HUF 69.5bn to HUF 4,597.0bn during the period. Except for a HUF 100m revaluation increase, the drop was the result of transactions.

Corporate forint deposits rose HUF 40.3bn to HUF 2,988.5bn in December. Foreign currency deposits fell HUF 60bn to HUF 1,428.9bn on withdrawals of HUF 62.9bn and a HUF 2.9bn revaluation increase.

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