Business loan growth reaches 7.4% in the second quarter

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Hungary’s business loan growth reached 7.4% on an annualized basis in the second quarter, the second highest rate in the European Union after Romania, the head of the department of the National Bank of Hungary said on Friday. (MNB) Bálint Dancsik, presenting the latest central bank report on lending trends. .

Including underwriting of corporate bonds, bank credit to non-financial companies rose 12%, according to the report.

Loans to SMEs increased by 20.6% over the period.

The participation rate for a moratorium on repayments introduced by the government in the spring of 2020 to protect against the economic fallout from the coronavirus crisis has fallen to 21% of the portfolio of companies, although rates remain higher in some sectors. Dancsik said.

The participation rate for commercial real estate loans is 46pc, while the rate for hotel finance is 80%.

A survey of loan officers showed that two-thirds of banks plan to increase their stock of business loans and loans to SMEs in the second half of 2021.

At least a fifth of banks anticipate a deterioration in the quality of the portfolio in the second half of the year with the end of the general moratorium.

Banks estimate that 5 to 15% of the stock of business loans in the moratorium right now could be “vulnerable.”

Banks reported “strong demand” for credit and unchanged credit conditions in the second quarter. They point to continued strong demand in the second half of the year, while 10% net said they would ease credit terms for large businesses, 14% would ease them for micro and SMEs, and 20% would ease them for loans. commercial real estate.

Banks said that the phasing out of the FGS Go! The business credit program would not “create large-scale stress” in the loan market, but should have a “tangible” effect in the agricultural sector.

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