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Banks support MNB funding for growth program

Hungarian bank leaders invited to the National Bank of Hungary (MNB) on Monday supported the MNB's "Funding for Growth Scheme", Mihály Patai, head of the Hungarian Banking Association said at meeting with journalists organised by the association on Monday. Details should, however, be clarified, association vice president Dániel Gyuris added noting that consultations about the details are expected to take one month. Starting growth is in the interest of the Hungarian banking system, Patai said. Both Patai (as UniCredit Bank Hungary President-CEO) and Gyuris (in his capacity as OTP Mortgage Bank President-CEO) were among the eight bank leaders invited by the MNB for consultations on the MNB package, designed to help lending to SMEs, announced by the MNB last Thursday. The MNB said that the eight bank leaders agreed to jointly work out yet unspecified details of the package, and agreed to regularly hold consultations with the MNB after a first such meeting held on Monday morning. The other six bank leaders present at the Monday meeting were OTP President-CEO Sándor Csányi, K&H Bank CEO Rik Scheerlinck, FHB Jelzálogbank chairman of the board Zoltán Spéder, CIB Bank chairman of the board György Surányi, Raiffeisen Bank CEO Wiedner Heinz, Budapest Bank President-CEO György Zolnai and deputy CEO of state-owned Hungarian Development Bank (MFB) Zoltán Urbán. The meeting was the first round in consultations about the programme, and will be followed by consultations with specialised financial institutions and savings cooperatives, the MNB said. The three-part "Funding for Growth Scheme" includes HUF 250 billion of refinancing for commercial bank loans to microbusinesses and SMEs, another HUF 250 billion for the conversion of foreign currency-denominated SME loans into forints and a HUF 1,000 billion (more than €3 billion) reduction of the country's short-term external debt which would make room for a similar reduction of international reserves and would reduce the stock of the central bank's two-week bills by a similar amount. The MNB will offer interest-free refinancing to banks in the first and the second part of the programme, and lenders will be allowed to reoffer the credit to SMEs at a fixed interest, possibly of no more than 2.0%. The third element of the programme aims at reducing the economy's vulnerability.