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Quality of restructured loans worsens in second quarter

The share of restructured household and corporate loans increased in the second quarter of 2011, but their quality also deteriorated, the National Bank of Hungary (MNB) said based on its fresh quarterly lending survey published on Thursday.

The quality of the restructured corporate loans worsened the most in the period, the survey showed.

The stock of restructured mortgage loans rose to 11.5% of all mortgage loans in the second quarter from 10.3% in the first quarter. At the same time, the quality of restructured mortgage loans deteriorated, as one-third of restructured mortgages were at least 30 days past due at the end of Q2, up from 27% in Q1. Non-performing loans that are over 90 days past due made up 18% of all restructured mortgage loans at the end of June compared to 16% three months earlier.

Within vehicle loans, the ratio of restructured loans rose to 11% from 10.4% in three months, and one-third of the restructured vehicle loans were overdue by more than 30 days at the end of Q2, up 3 percentage points from the end of the previous quarter.

In the corporate-loan segment, 7.8% of the total corporate loan stock was restructured at the end of June. The ratio rose from 6.9% three months earlier. At the end of June one-fourth of the restructured loan stock was over 90 days past due, double the amount recorded in Q1. Banks responses suggest that in Q2 the sharp rise in the late payments did not stem primarily from commercial property loans.