OTP Bank has launched a HUF 100 billion loan program for medium-sized businesses from June, deputy CEO of the commercial banking division László Wolf announced.
Business can pick from 30 different loan facilities as part of the program, which will run until the end of 2013.
“We would like to finance clusters, sub-contractors, consumer groups as well as our customers’ partners", Wolf said. He stressed that OTP has sufficient liquidity to finance the program. “We think that the only limit to increasing lending activity in Hungary is the low number of qualified applicants.”
OTP expects that the average loan amount within the program will be about HUF 300-400 million. OTP will automatically offer 40% of the approved credit line for an over two-year facility of the customer’s choice, which could either be a bank guarantee or an investment loan.
In addition, customers will automatically receive a revolving credit line up to their monthly sales revenues or bank account turnover.
The program is designed primarily for OTP’s existing customers. It focuses on medium-size businesses, as there are several financing options available for small and micro enterprises in Hungary, Wolf said.
“We believe that medium-size companies should be strengthened in order to boost economic growth.”
OTP sees 1.2% increase in consumption
In 2011, OTP expects a 1.2% increase in domestic demand, stagnating investments and a 9% increase in exports.
The worst is over for Hungary, head of OTP’s analysts’ department Gergely Tardos said. The two main issues of Hungarian economic growth are the implementation of the structural reforms by the government and the strengthening of the domestic demand, Tardos said
Due to the downside risks of domestic demand, Tardos expects a further weakening, or stagnation in the best case in the short and medium run. While corporate investments stagnate or show a slight increase, investments in the construction sector are still decreasing, he added. (GL)