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Value of new corporate loans rises in March

The value of new corporate loan contracts signed by Hungarian banks rose in March, increasing for the first time since October, fresh seasonally-adjusted data published by the National Bank of Hungary on Thursday show.

Contracts for euro-denominated loans accounted for the better part of the increase. The unadjusted value of new forint corporate loan contracts was HUF 141.1 billion in March, up HUF 39.5 billion from February.

The value of new forint loan contracts rose after two months of declines. The average rate for forint corporate loans was 11.90% in March, up 25bp from February.

Seasonally-adjusted data show a more moderate, HUF 12.2 billion increase of new forint loan contracts to HUF 159.5 billion in March, but the rise is the first one since November.

Loans up to €1 million accounted for the entire increase as the value of new contracts for bigger loans fell HUF 1 billion to HUF 91 billion.

After sharp declines in the previous two months, the value of new EUR-based corporate loan contracts jumped HUF 94.7 billion to HUF 192.2 billion in March compared to February, according to unadjusted data.

The value of the new contracts nearly reached the level in December, a record reached after many banks stopped signing new Swiss franc-based loan contracts because of crisis-related volatility.

The CHF-based loans were a very popular corporate lending product in Hungary. It should be noted, however, that the forint-term increase in new contracts for EUR-based loans was magnified by a 4% weakening of the forint against the euro in March and a 15% decline compared to December.

The value of new EUR-based loan contracts also rose according to seasonally-adjusted figures, climbing HUF 18.9 billion to HUF 157.2 billion. Within the total, the value of new contracts for loans over €1 million rose HUF 13.2 billion to HUF 121.1 billion.

After a sharp decline in February, the average lending rate for EUR-based corporate loans rose 31bp to 4.56%. Most of the increase was due to a sharp 41bp rise in the average rate for loans over €1 million to 4.53%.

The average rate for small loans rose just 4bp to 4.67%. The rise in lending rates for euro-denominated loans followed a steady fall started in October, parallel with the start of the ECB easing cycle.

Companies placed HUF 25.3 billion less into sight and current account forint deposits in March than in February, but HUF 285.2 billion more into fixed forint deposits. Adjusted for seasonal factors, new fixed forint deposits rose in March for the first time since December.

The average rate paid on forint deposits fixed for less than one year -- which account for 99% of all fixed forint deposits -- rose a slight 12bp to 8.98%, increasing for the first time since November, when the average rate was 10.80%.

After little change in the previous month, new euro short-term fixed deposits increased by HUF 210.9 billion to HUF 900.9 billion in March. New fixed euro deposits fell sharply in November then rose in December, only to fall again in January and February.

The value of new euro deposits rose even as banks the average rate for sight and current account deposits slipped 9bp to 0.50% and the rate for short-term deposit rates dropped 7bp to 1.84% in March. Euro deposit rates have declined steadily since September. (MTI-Econews)