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Hungarian businesses net loan repayers again in April

Loans outstanding of Hungarian non-financial companies fell for the third month in a row in April, and this time not only the stock of foreign-currency loans but that of forint loans fell too on repayments, the National Bank of Hungary (MNB) reported.

Businesses increased both forint and foreign currency deposits in the month. Charts on seasonally and exchange-rate adjusted figures reflect net loan repayments in the last two months.

Businesses' overall loan stock fell by a sharp HUF 113 billion in April to HUF 7,481 billion while their overall deposits rose HUF 147 billion to HUF 3,813 billion at the end of April. The share of foreign currency loans within the total rose to 56.6% from 56.1% at the end of March. The share was down 1.4 percentage points from the end of 2009 and fell 4.4 percentage points in one year.

Businesses' stock of combined loans fell HUF 235 billion from the end of 2009 and was down HUF 894 billion from April 2009. Their deposits, including forint and forex deposits, were down just a slight HUF 8 billion from the end of last December and were HUF 185 billion lower than a year earlier.

The forint loan stock of businesses fell by HUF 88 billion from the end of March to HUF 3,221 billion at the end of April as a result of HUF 80 billion in repayments and HUF 7.5 billion in revaluation and other changes. The April drop came after three months of rise and brought companies' forint loan stock back to last December's level, and to HUF 44 billion below their level a year earlier.

Net repayments on foreign currency denominated loans, which has been the trend recently, cut the stock by HUF 20 billion last month, and, including a HUF 6 billion reduction due to exchange rate and other changes, the stock to be worth HUF 4,200 billion. The stock of businesses' foreign-currency denominated loans at the end of April was down HUF 238 billion from the end of last year and was down by a sharp HUF 851 billion in one year.

Excluding exchange rate changes and seasonal effects, companies repaid net HUF 65.3 billion forint loans in April, about the same volume as they net borrowed in March.

MNB charts suggest that under the adjusted figures, businesses were on the whole net repayers, if only to a limited extent, already in March after limited net borrowings in the first two months of 2010 and net repayments between last May and December. The central bank noted that, because of fluctuations with the crisis, the results of seasonal adjustment are more uncertain than usual.

Businesses' forint deposits rose HUF 45 billion to HUF 2,447 billion by the end of April. Forint deposits rose HUF 11 billion less than they fell in March. Forint deposits were HUF 132 billion down from the end of last year and dropped HUF 245 billion in one year.

Foreign currency deposits of companies rose by HUF 56 billion, somewhat more than they did in March, to reach HUF 1,366 billion on the combined effect. The foreign currency deposit has risen each month since January, and were HUF 117 billion higher than at the end of December and were HUF 54 billion higher than at the end of April 2009.

Figures adjusted for exchange rate changes and seasonal effects show net forint deposit placements of HUF 23.4 billion and net HUF 74.1 billion net placement in foreign currency deposits in April. The results of seasonal adjustment of foreign currency loans could not be interpreted due to big changes in the time series, the bank said.

The financial crisis and the recession made Hungarian companies net lenders in the last quarter of 2008. Their position improved into a more or less neutral one between February and June 2009, before deteriorating, with monthly repayments far exceeded loans, last July. Slight net lending reappeared in the first two months of this year but businesses slipped again into net repayment in March. (MTI – Econews)