Household Lending Stock Expansion Decelerates in Q2

Banking

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In the second quarter of the year household lending stock of credit institutions expanded by HUF 284 billion, giving an annual growth rate of 11%, down from a 15.2% growth at the end of 2021, the National Bank of Hungary (MNB) said in a report on Friday.

The gradual decline in the growth rate is partly attributable to the fact that the contribution of the repayment moratorium to the expansion in loans is now only moderate. Housing loan transactions accounted for HUF 141 bln of quarterly expansion in transactions, while in the case of consumer loans, excluding prenatal baby support loans, repayments equaled the volume of loan disbursements.

Following the quarterly expansion of HUF 99 bln, prenatal baby support loans outstanding amounted to HUF 1.682 trillion in June, corresponding to 18% of household loans outstanding.

The lending stock stood at HUF 9.525 tln in June.

In Q2 new lending grew 9% annually to HUF 786 bln. The quarterly disbursement of housing loans at HUF 427 bln was a record, after a 17% growth.

Half of the housing loans applied for were used to purchase used homes, down 17 percentage points from the base period. This decline was caused by the increase in the share of loans spent on new homes as a result of the FGS Green Home Program, which reached a ratio of 39%.

For the construction and purchase of new homes, the average loan applied for amounted to HUF 22 mln at the end of Q2, which is HUF 5.7 mln more than a year earlier. The contract amount weighted average maturity rose to 22.2 years.

According to responses to the Lending Survey, credit conditions are expected to be tightened for both housing and consumer loans, with 44% and 48% of banks planning to tighten restrictions, respectively. In H2 a net 83% already expect a fall in credit demand, attributable to both the rising lending rates and the uncertain economic environment.

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