Savings cooperatives try to win back clients with forint loans for early FX repayment scheme

MNB

Hungary's savings cooperatives are offering forint loans to borrowers who want to avail of an early forex mortgage repayment scheme with the aim of winning back clients they lost earlier, the National Association of Savings Cooperatives (OTSZ) told MTI on Tuesday.

The savings cooperatives are offering the loans at an APR of 10-11%, although each of OTSZ's 108 members will have a degree of independence when determining conditions, OTSZ said.

Under a scheme launched by the government at the end of September, borrowers may repay early, in full, their foreign currency-denominated mortgages at a discounted exchange rate until the end of December. Banks are covering the cost of the difference between the discounted exchange rate and the market rate.

Interest rates on the loans savings cooperatives are offering will be pegged to the six-month BUBOR. The loans will be offered until the end of the year.

Just 1.4% of the some HUF 6,000bn in foreign currency-denominated lending stock in Hungary is on the balance sheets of OTSZ members. The members have almost HUF 600bn in forint resources for lending and a capital adequacy ratio double the 8% minimum requirement.

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