MNB: Corporate lending shows mixed picture in Q2

MNB

Photo by Jessica Fejos

Corporate lending stock of financial institutions declined 3.4% in the second quarter of 2015 compared to the same period of last year as growth in SME lending failed to counterbalance the decline of lending to large companies, the National Bank of Hungary said in a report, Hungarian news agency MTI reported today.

Outstanding borrowing by non-financial corporations from credit institutions decreased by HUF 222 bln in Q2 on net transactions, companies made repayments of HUF 171 bln for forint loans and HUF 51 bln repayments of FX loans.

The fall in lending was mostly caused by big one-off transactions of larger companies, for example the HUF 52 bln debt consolidation of the Budapest Transport Centre (BKK), MNB said.

Lending by banks to companies fell 3.7% in the second quarter. Lending to SMEs contributed a 0.8 percentage point growth but the fall in lending to large companies was a 4.5 percentage point drag.

SME lending was lifted by the MNBʼs Funding for Growth Scheme (FGS), HUF 152 bln of new contracts were signed in Q2. Around 42% of loans extended to the SME sector were granted under the FGS.

The gross volume of new corporate lending by credit institutions was HUF 638 bln in Q2, up 17% compared to the average volume of new loans of the previous four quarters and up 28% year-on-year.

In the second quarter, credit conditions continued to ease. In net terms about 17% of the banks eased conditions, based on an MNB survey.

Market share objectives, intensification of competition, improvement in economic prospects, favorable liquidity and the capital position of banks contributed to the easing.

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