Continued Decline in Demand for Corporate Credit

Banking

A quarterly survey of loan officers published by the National Bank of Hungary (MNB) on its website yesterday shows a continued decline in demand for corporate credit but indicates a pick-up in demand for both home and consumer loans.

Some 39% of banks that responded to the survey, conducted from Oct. 1-17, reported a decline in demand for corporate loans, and around two-thirds said demand was down for long-term loans. Corporate credit conditions were little changed in Q3, but 12% of banks indicated increased spreads for large and medium-sized enterprises, and 21% raised creditworthiness thresholds for small enterprises and micro businesses.

The lenders don't plan significant changes to credit standards in the coming six months, but one-fifth said they intended to cut fees in response to increased competition. Around 21% of banks tightened conditions for commercial real estate loans in Q3, and 43% raised standards for credit for office building projects, citing industry-specific problems.

About 24% said demand for commercial real estate loans had declined, but 43% reported increased demand for logistics property investments.

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