Csányi: Corporate lending stock of banks could reach low point in 2016
Despite economic growth corporate lending stock of banks could still fall and reach a low point by 2016, but then a 5.3% annual increase could happen, OTP Bank chairman-CEO Sándor Csányi said at a conference organized by the Society of Hungarian Economists yesterday, state news agency MTI reported.
There is a lack of credit demand in Hungary as companies are heavily in debt, with corporate debt reaching 87% of GDP, Csányi said. There are no problems on the credit supply side, banks are practically "chasing customers" with average lending rates as low as 2.5%.
In the whole of the banking sector there is HUF 10 bln in free liquidity of which HUF 8 bln would be instantly distributable but demand is low, added Csányi. The chairman-CEO sees around 7% growth between 2016 and 2020 for banks retail lending, however, the regulatory environment and demographic trends, the falling number of Hungarians aged between 20 and 35 years old, could slow growth.
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