K&H: large programs drive green loans

By: Trademagazin Date: 2024. 11. 20. 11:23

According to data from the Hungarian National Bank, the total green corporate and municipal loan portfolio has increased more than ninefold from 69 billion forints at the end of 2020, reaching 633.45 billion forints by mid-2024. In the corporate segment, the bank is actively supporting the surge in green investments in the e-car program, renewable energy financing, and the commercial real estate market. However, the retail green loan segment is growing more slowly due to the lack of state subsidies. K&H Bank has so far disbursed more than 20.7 billion forints in green home loans for the purchase and modernization of energy-efficient properties, and in the first nine months of 2024, it disbursed a total of 9.4 billion forints in green home loans. K&H Bank is a prominent player in the dynamically growing green lending market with a share of around 20 percent.

Growth in green lending

According to the MNB’s semi-annual data, the stock of green loans has jumped significantly: on December 31, 2020, the total green loan stock was HUF 69.13 billion, which reached HUF 556.42 billion by the end of June 2024. Since the end of last year, the total green loan stock has increased from HUF 523 billion to HUF 633 billion. The growth was mainly driven by two segments: renewable energy lending, which increased by HUF 70 billion from HUF 274 billion to HUF 357 billion, and real estate financing, the volume of which jumped from HUF 89 billion to HUF 167 billion. Meanwhile, financing classified as other green loans fell from HUF 138 billion to HUF 77 billion.

The total stock of green loans for retail customers increased by HUF 32 billion, from HUF 191 billion to HUF 223 billion.

Green residential loan program

With its own green home loan, K&H Bank supports the purchase of energy-efficient new properties and the energy efficiency modernization of used homes. Since the launch of the program, more than 20.7 billion forints have been disbursed for these purposes. In the first nine months of 2024, the volume of green home loans reached 9.4 billion forints, which accounted for 6.4 percent of the total new residential mortgage loan disbursement.

Green home loans help customers with pricing discounts to purchase or modernize more sustainable homes. Residential green lending is growing slowly, and experience shows that in the absence of central support, the discounts given by the bank do not have a sufficient incentive for borrowing for renovations.

In addition, part of the K&H mortgage portfolio complies with the MNB’s green capital requirement discount program, which it regularly reports to the central bank. The mandatory request for an energy certificate for all new loan applications from January 2022 will help ensure that the bank’s portfolio meets sustainability criteria.