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Households' net financing capacity decreased to 5.3% of GDP in Q1

Household net lending, or net financing capacity, HUF 1,489 billion, was equivalent to 5.2% of GDP in the four quarters through Q1 this year. Net lending, HUF 345 billion, amounted to 5.3% cent of quarterly GDP in Q1, the National Bank of Hungary (MNB) said in a report on preliminary financial accounts data on Thursday.

Excluding the effects of the capital transfer related to early repayments of foreign currency mortgages, households' net financing capacity was HUF 149 billion, or 2.3% of quarterly GDP, in Q1, based on MNB's own GDP estimate. The net financing capacity of households, or net household financial savings, reached 7.7% of the quarter's GDP in Q4 2011, boosted by an early FX mortgage repayment scheme that reduced household debt. Excluding the repayments, net household savings reached 5.5% of GDP in the quarter.
In Q1, on the assets side, holdings of forint deposits and mutual fund shares declined sharply and forint cash, life insurance reserves and other assets fell slightly due to transactions. By contrast, foreign currency deposits and holdings of debt securities issued by central government increased. On the liabilities side, foreign currency loans fell sharply due to transactions, mainly as a result of early mortgage repayments. By contrast, forint loans increased considerably, also mainly driven by early repayments.
In Q1, just like previously in Q4 2011, early repayments of foreign currency mortgages had a significant impact on net lending of the household, general government and financial corporations sectors, the MNB added.
Calculated at market exchange rates, households repaid HUF 642 billion of their foreign currency mortgage loans, taking advantage of the early repayment option, and they received in capital transfer HUF 122 billion from financial corporations and HUF 52 billion from the general government in Q4 2011.
In Q1 this year, households repaid a further HUF 712 billion of their foreign currency mortgage loans under the early repayment scheme, calculated at market exchange rates, and they received in capital transfer HUF 196 billion, that is HUF 144 billion from financial corporations and HUF 52 billion from the general government.