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Corporate lending stock climbs almost 14% in 2018

Transactions lifted Hungarian lendersʼ stock of corporate loans by 13.6% or HUF 892 bln last year, shows the latest "Trends in Lending" report released by the National Bank of Hungary (MNB) on Friday.

The stock of loans to big companies was up 17%, while the stock lent to microbusinesses and SMES - excluding family-run businesses such as farms - rose almost 12%. New contracts for credit totaling HUF 3.419 trillion were signed during the year, down 4.8%.

Alone in the fourth quarter, net lending raised the stock of corporate loans by some HUF 179 bln. Forint loans accounted for HUF 133 bln of the increase, and FX loans for HUF 46 bln. Loans to SMEs made up HUF 142 bln of the increase.

Banks signed contracts with borrowers for HUF 781 bln in credit in Q4, including HUF 456 bln in forint loans and HUF 207 bln in FX loans. Short-term credit accounted for HUF 263 bln of the total.

A survey of loan officers conducted for the report showed slightly less than 25% of banks eased their corporate lending conditions in net terms in Q4. The change reflected mainly looser collateral requirements and narrower interest rate spreads. The same degree of easing applied to small as well as big businesses.

Looking ahead to the next half year, respondents said they expect a further easing of lending conditions for microbusinesses and small companies, but tightening conditions on loans for commercial real estate ventures.

Interest rates on new euro loans decreased, falling to 2.03% for small loans and to 1.31% for large loans. Rates for forint loans were 3.00% for small loans and 1.83% for big loans.

Nearly half of respondents perceived a pick-up in demand for forint loans, while there was no additional demand for FX loans. Demand should rise in the next half year, mainly for long-term loans, according to the loan officers.