EcoMin Márton Nagy says intervention coming in corporate lending

In our previous article we wrote in detail about the state of corporate lending:

On retail lending

Retail lending, personal lending and housing lending are all very strong, 2024 is the peak year for housing lending, we are talking about a clear turnaround, Márton Nagy said, adding that housing transactions are up 40% year-on-year, the housing market is booming, while both the used and new car markets are growing at over 10%.

Workers' credit, the possibility to withdraw money from voluntary funds, the new housing subsidy for young people and the rural home renovation programme have not yet had an impact, but the situation of families will improve further in 2025, according to the minister.

For households, there is a 10% increase in credit, and clearly there has been a turnaround and a very significant outflow of credit, especially for housing loans, and this is market housing loans, not even subsidised housing loans, he said.

On corporate lending

For companies, the demand has not yet arrived, and all sources of credit, capital or non-repayable funds are largely used for efficiency investments or for financing working capital. For corporates, credit growth is around 3%, with a decline in forint loans and an increase in foreign currency loans.

Márton Nagy says this is where intervention is needed.

For the Széchenyi Card, the interest rate was already lowered to 3.5% from 5% for investment loans during the Demján Sándor Programme. In November-December, this also brought an additional HUF 40-50 billion in loan disbursements, but this is not enough, lending must be started. They are also relying heavily on the central bank and commercial banks.

In the case of the commercial banks, discussions have started on how they can ramp up lending, especially in the case of forint lending to corporates.

He hopes that an agreement can be announced by the end of this week. We would like to see some kind of commitment from the banks on this. He says, "The bank is also interested in getting the economy going and corporate lending going because that means more business for them. We will see what ideas the banks come up with."

Asked what the central bank has to do with this, he said that the new central bank governor will see. “I have taken an oath, especially to myself, that I will not interfere in the affairs of the central bank, so I will stop here and the central bank will decide what tools, if any, it wants to use to do that.”

Cover photo: Portfolio