The stock of corporate loans increased by 14.9% y/y to HUF7,624.7bn at end-March, the National Bank of Hungary (NBH) reported yesterday. The growth of the corporate loan portfolio remained quite stable for the past four quarters. The stable growth masked some diverging trends in terms of borrowing by sectors — the stock of loans to industrial companies and the trade sector picked up for example, which was offset by slowing borrowing by other sectors like construction, transport and storage and the accommodation services sector. We consider the slowdown in construction borrowing to be expected, given the likely peak of the sector’s activity this year. Lending to the transport and storage might also weaken in relation to the slowing EU fund absorption, in our view.
HUF loans accounted for the larger 57.9% share of the total corporate loan stock at end-March. The growth of HUF loans slowed down slightly from the previous month but the maturity structure of the portfolio lengthened. Long-term forint loans accelerated to 20.1% y/y growth while the growth of short-term forint loans slowed down significantly. Corporate overdrafts also rose at a decelerating pace of 17.4% y/y. Forex corporate loans were up by 11.7% y/y at the end of March, compared to the 11.0% y/y growth for the preceding quarter.