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Retail loan rates rise, new loan contracts drop in July

Except for overdrafts, rates for forint retail loans rose in July, after a steady decline since February-March, according to the National Bank of Hungary's (MNB) monthly rates report published on Tuesday.

The bank noted that a 25-basis-point base rate rise, which took effect on June 20, affected retail rates. At the same time, rates for euro-denominated retail loans rose, while rates for most Swiss franc-denominated retail loans fell. Forint retail deposit rates also fell, but only slightly, and the margin between deposit and consumer credit forint rates fixed for up to a year narrowed from 11.84 percentage points in June to 11.64 percentage points in July.
Banks signed for slightly fewer retail loans in July than they did in June, whether denominated in forints or in Swiss francs or euros. Swiss-franc-denominated loans continued to dominate retail lending, their share accounting for more than two-thirds of new consumer loan contracts and three-quarters of new home loans signed in July. New forint contracts for home loans came to Ft 13.7 billion in July, Ft 3.4 billion less than in June. New CHF-denominated home loans were Ft 45.6 billion in June, slightly down from June, and new EUR-denominated home loan contracts totaled a mere Ft 0.4 billion, down Ft 0.2 billion from June.
The average rate on forint home loans rose 37bp from June to 9.61% in July. The rate for CHF-denominated home loans for loans with interest fixed for less than one year fell 17bp to 3.23%. APR for the average forint home loan rose 25bp to 12.29%; for CHF-denominated loans, APR was down 34p at 5.48%.
Banks signed new forint consumer loan contracts for Ft 20.2 billion in July, Ft 1.6 billion less than in May. Swiss franc-denominated contracts accounted for another Ft 93.2 billion of the new contracts in June, Ft 200m less than in the previous month. New euro-denominated loan contracts for loans with a floating rate or fixed for less than one year fell Ft 0.2 billion from June to Ft 0.8 billion worth. New contracts for similar-term Swiss-franc denominated consumer loans (including personal loans and free-purpose mortgages, but excluding car loans) fell Ft 4.6 billion from June to Ft 37.9 billion.