Economy 3 October 2025, 9:20am

Corporate creditworthiness has deteriorated, Hungary's banks say

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Based on the National Bank of Hungary's (MNB) economic index, banks perceived a slight deterioration in their operating environment in the first half of 2025, and looking ahead to the second half of 2025, they expect the economic situation to remain unchanged, the central bank said on its website. The creditworthiness of retail customers has not changed significantly, but in the corporate segment, a net 24% (i.e., the majority) of banks perceived a deterioration in creditworthiness in the first half of 2025, and a net 16% expect further deterioration.

MNB: nem csak a lakosságnak lehet probléma a változó kamatozás

The National Bank of Hungary conducted its Banking Business Cycle Survey again in July 2025. Based on the responses,

the banking system experienced a slight deterioration in the business cycle in the first half of 2025.

According to the banks, among the components of the economic sentiment index,

the uncertainty of the international and domestic economic environment,
the increase in operating costs,
the tightening of the regulatory environment, and
the deterioration of corporate creditworthiness

contributed negatively to the assessment of the operating environment. At the same time, increased market competition continues to have a positive effect on the economic situation, which is also supported by rising household demand for credit.

Looking ahead to the second half of 2025, banks expect the economic situation to remain unchanged.

The domestic banking system remains stable and liquidity is abundant. As a result, domestic banks have maintained their strong lending capacity, which allows them to support lending processes, according to the central bank.

Factors determining the development of economic sentiment:

According to the banks, the economic environment has deteriorated significantly. In 2025 H1, half of the responding institutions perceived a deterioration in the domestic macroeconomic environment, and a net 27% in the international macroeconomic environment. Looking ahead, no further deterioration is expected by the banking system in the second half of the year.
Market competition has intensified and thus continues to have a positive impact on the economic situation. Banks perceived the intensification of competition primarily against non-bank market participants (net 35%), but one-quarter of the institutions also reported more intense market competition in payment services and in the retail and corporate segments. Looking ahead, a net 38% of the banks expect an increase in the corporate segment and half of them in the retail segment, which may be driven by the introduction of the Certified Corporate Loan product certification, the Demján Sándor Programme and the Home Start programme launched in the autumn.
According to the banks, access to funds has not changed significantly in the past six months. Looking ahead, 8% expect access to short-term funds to deteriorate as deposit growth slows, and 11% expect interbank liquidity to tighten as central bank programmes are phased out, while access to long-term funds is expected to remain unchanged.
Credit risks have not materialised thanks to the stable labour market, borrower-based measures and high corporate liquidity; therefore, the contribution of portfolio quality to banks’ economic sentiment was close to neutral. The creditworthiness of retail customers has remained largely unchanged, but in the corporate segment a net 24% of the banks reported a deterioration in creditworthiness in 2025 H1, and 16% expect further deterioration.
One-half of the banks perceived a pick-up in retail credit demand in 2025 H1, with demand for corporate loans remaining unchanged. Looking ahead, one-half of the responding institutions expect household loan demand to pick up in the next six months.
30% of the banks reported tightening in the regulatory environment, and 27% expect this to continue in the next six months. This can be explained by the tightened extra profit tax, the mortgage interest rate cap, the ATM law and the amended Capital Requirements Regulation (CRR3).
Banks’ pre-impairment profitability has stopped declining, and only 43% of the respondents reported an increase in operating expenses, which is lower than usual. Looking ahead, only a net 5% of the banks expect their profitability to decline, while two-thirds anticipate an increase in operating expenses.

Overall, based on the economic index calculated from the difference between banks experiencing improving and deteriorating economic conditions, respondents perceived a slight deterioration in their operating environment in the first half of 2025, while

looking ahead to the second half of 2025, they expect the economic situation to remain unchanged.

Cover photo (for illustration purposes only): Shutterstock