Lenders' Sentiment Worsens in H1

Banking

Banks' economic sentiment deteriorated in the first half of the year, news agency MTI reports, citing a survey conducted by the National Bank of Hungary (MNB).

Lenders' perceived decline in demand for credit compared to the previous half was the biggest contributing factor to the worsening sentiment, but the uncertain macroeconomic environment, higher client risk, worsening profitability, and tighter availability of funds also impacted their assessments, the central bank and market regulator said. An increase in competition was the only positive factor lenders cited, it added.

Looking ahead, a growing number of banks expect a positive shift in the economy in H2 2023.

The survey shows a net 40% of banks had a negative assessment of the impact of the macroeconomic environment, compared to nearly all lenders in H2 2022. In the coming half, the indicator could turn positive for the first time in two years, MNB said.

Around 30% of banks said it was harder to access long-term funds for lending, while 14% said it was difficult to get short-term funds. In H2, 16% expect a deterioration in the availability of long-term funds and 22% said it would be harder to get short-term funds.

About 59% of lenders said retail borrowers' creditworthiness had deteriorated as real wages fell and the cost of living rose. Around 43% of banks said the creditworthiness of corporate borrowers had worsened because of the uncertain economic outlook and industry-specific risks.

Looking ahead, 51% of lenders see retail borrowers' creditworthiness continuing to decline and 41% said the same for corporate creditworthiness.

About 59% of banks said retail credit demand had fallen and 49% pointed to a drop in demand for corporate credit.

Approximately 22% of banks reported a deterioration in profitability before impairment and 68% said operating costs had increased.

ADVERTISEMENT

Varga: Gov't Respects MNB's Independence MNB

Varga: Gov't Respects MNB's Independence

Hungary Makes Proposals to Ease Administrative Burden for EU... EU

Hungary Makes Proposals to Ease Administrative Burden for EU...

Money Motion 2024: The Future of FinTech Unfolds in Zagreb Fintech

Money Motion 2024: The Future of FinTech Unfolds in Zagreb

Investors of the Year in Limelight at Hipa’s Award Ceremony Awards

Investors of the Year in Limelight at Hipa’s Award Ceremony

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.