MNB: Transactions reduce credit institutionsʼ household loans by HUF 71 bln in Q1


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In 2016 Q1 credit institutionsʼ outstanding household loans decreased by HUF 71 billion as a result of transactions, while write-offs and reclassifications resulted in a further HUF 20 bln decline, the National Bank of Hungary (MNB) said today, according to Hungarian news agency MTI.

In the case of forint and FX loans, repayments exceeded disbursements by HUF 69 bln and HUF 2 bln, respectively. The decrease in outstanding housing loans and other loans amounted to HUF 39 bln and HUF 52 bln, respectively. 

The transaction-based annual rate of decline in the portfolio dropped to 5.4% from the 15.1% recorded in the previous quarter. This improvement was caused by a base effect, as the indicator does not contain the effect of the 2015 Q1 mortgage loan settlement any longer. The decline would have been 4.5% with the adjustment of the settlement and FX conversion of vehicle loans and personal loans.

The volume of new household loan contracts (excluding loan refinancing related to the FX conversion) was HUF 164 bln in Q1. The value of new loans was approximately 12% below that of the previous quarter, but the four-quarter rolling volume increased by 24% year-on-year.

The annual growth rate was 36% for housing loans, while home equity loans and other consumer loans increased by 14% and 13%, respectively.

Based on banksʼ responses to the Lending Survey, there was no easing in credit terms on the whole in any of the loan segments in the first quarter of the year.

In the future, market share objectives and an increase in risk tolerance may facilitate possible easing, but no major change may be expected in the next half year. In net terms, 11% of respondents indicated an easing of consumer credit conditions, but in the housing loan segment merely 7% of them plan to ease conditions until 2016 Q3.

In net terms, 44% of banks in the Lending Survey reported higher demand for housing loans in Q1, while 37% indicated increased demand for consumer loans. All responding banks expect an upturn in demand for housing loans in the next half year, and two thirds of banks expect an expansion in consumer loans as well. The expectations for housing loans are supported by the availability of the revamped home purchase subsidy scheme for families.

In Q1, the average APR and interest rate spread on forint housing loans did not change, the annual percentage rate of charge on new contracts was still 5.8%. Similar to their end-December values, at the end of the quarter the APR of variable-rate housing loan products stood at 4.9%, while the average APR level of fixed-rate loans was 6.5%.


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