The stock of bank loans to households increased by 1.2% q/q to HUF5,866.7bn at end-Q1, the National Bank of Hungary (NBH) reported. The increase was on account of strong gross borrowing by households, which appeared to has picked up considerably as of Q2’18. Gross disbursement of new loans amounted to HUF443.3bn in Q1 compared to gross loan repayments of HUF364.3bn. The amount of written-off and sold loans has also declined visibly in the past few quarters, in our opinion as evidence of the improving quality of the retail loan portfolio. The stock of loans to households overdue by more than 90 days declined by 4.4% q/q. Their share in the total retail loan portfolio consequently fell to 4.2% at the end of the quarter, down by 0.3pps q/q. Bank provision coverage of the total retail loan portfolio declined marginally by 0.2pps q/q to 4.5% while the provision coverage of retail loans overdue by more than 90 days was down at a more visible margin of 0.8pps q/q to 65.3%.