Can the lending boom continue next year?

By: Trademagazin Date: 2024. 12. 12. 11:17

The volume of retail loan agreements this year could even surpass the record year of 2021, if the growth rate experienced during the year persists until the end of the year. However, the main question is: will the rapid expansion continue next year, and will we get closer to the EU average, which is significantly higher than the domestic average in terms of lending? The MBH Bank analyst examined the most important trends that determine lending processes in Hungary.

Due to soaring inflation and loan interest rates, as well as a significant deterioration in the economic outlook, the Hungarian population’s demand for loans fell very significantly in 2023. For example, customers contracted only half as much (HUF 595 billion) of housing loans, which are the most significant retail loan product, with credit institutions as in 2022 (HUF 1,195 billion). This large decline did not lead to a decrease in the loan portfolio only because, partly out of prudence and partly out of well-understood financial interest, the intensity of capital repayments also decreased, after the previously typical proportion of early repayments decreased to a fraction. However, in 2024, although economic performance fell short of expectations from quarter to quarter, the demand for loans from the population recovered with unexpected speed. For example, in the first three quarters of the aforementioned housing loans, credit institutions concluded contracts with customers for more than HUF 1,000 billion, which is a 120% increase compared to the same period of the previous year, and there is every chance that the volume of new contracts will even break the record of HUF 1,300 billion in 2021 throughout the year.