Bank chiefs optimistic about MNB "Funding for Growth Scheme"

Hungarian banking industry leaders expressed optimism about the National Bank of Hungary's recently unveiled “Funding for Growth Scheme” at a conference organized by Portfolio.hu on Wednesday. The bank chiefs agreed that lending in Hungary would soon pick up and said they had a stake in seeing the economy grow and lending expand. The MNB scheme will contribute to achieving this aims, they added. Erste Bank Hungary chairman-CEO Radovan Jelasics said the joint goal of banks, regardless of their foreign or domestic ownership, was to restart and expand lending. OTP Mortgage bank head Dániel Gyuris said Hungary's banking sector had racked up significant losses in the past years, but added that sacrifices made to achieve stability had established the foundation for expanded lending. The bank heads agreed that lenders' capital positions were not holding back lending growth. Under the Funding for Growth Scheme, the central bank will make a combined HUF 500 billion of 0% financing available to banks for SME lending and the conversion of foreign currency-denominated corporate loans into forint ones. Lenders' interest margin will be capped at 2.5% on loans financed with the MNB credit. The central bank will also cut international reserves by €3 billion by reducing short-term external debt, thus lowering the stock of two-week bills from HUF 4,500 billion to HUF 3,600 billion.