Budapest, 18 February 2025 — The household credit market picked up further in the final quarter of 2024. Household loans outstanding of credit institutions increased by 9.7 per cent in 2024 as a whole. The value of new loan contracts concluded by banks with households grew by 51 per cent in the fourth quarter relative to a year earlier. Here, the value of housing loan contracts nearly doubled. According to the Lending Survey, banks left standards on housing loans unchanged, while 41 per cent of them eased standards on consumer loans. Looking ahead, the banks participating in the survey expect the increase in demand for both types of household loans to continue in 2025 H1.
There was no turnaround in corporate lending at the end of 2024, and thus, credit institutions' loans outstanding to non-financial corporations expanded by only 1.6 per cent in 2024. According to the Lending Survey, with unchanged standards on corporate lending, banks reported declining demand for long-term loans. Looking ahead, a quarter of the banks expect demand to pick up for credit as an effect of the Sándor Demján Programme starting in January 2025, which they expect to be felt in both company sizes, with demand expected to pick up mainly for forint loans.
Household loans outstanding of the credit institution sector increased by HUF 287 billion in 2024 Q4 as a result of loan disbursements and repayments, with the annual rate of credit growth picking up to 9.7 per cent from 7.9 per cent at the end of the previous quarter. Domestic growth rate ranks fourth in the EU comparison, significantly exceeding the average growth rate of the Visegrád Group of countries (4.7 per cent).
The volume of new lending to households was HUF 728 billion in the fourth quarter, exceeding the volume of disbursement a year earlier by 51 per cent. This mainly reflected a 92 per cent increase in the volume of housing loans; and personal loans disbursement also grew by 66 per cent. The average value of housing loan contracts was HUF 13.2 million in December 2023, while in December 2024 it was HUF 19.5 million, which was also contributed to by the higher loan amounts available in the HPS Plus program. In December 2024, banks provided market-based housing loans at an average 6.5 per cent interest rate (APR: 6.7 per cent). Taking into account government-subsidised credit facilities, the average initial interest rate to be paid by new borrowers was 5.6 per cent. No material change took place in interest rates despite the expiry of the voluntary APR cap at the end of last June.
Based on the responses to the Lending Survey, banks overall left standards on housing loans unchanged in 2024 Q4, while 41 per cent of them eased standards on consumer loans. Looking ahead, two-thirds of the banks expect to increase spreads on housing loans, while they do not plan to change standards for consumer loans. Banks expect the increase in demand for both types of credit to households in the previous quarter to continue in 2025 Q1.
Credit institutions' loans outstanding to non-financial corporations rose by HUF 169 billion in 2024 Q4, with the annual rate of credit growth slowing from 3.2 per cent in the previous quarter to 1.6 per cent at the end of December. Based on preliminary data, the stock of lending to SMEs grew at a similar rate year on year. The growth rate of domestic corporate credit lies in the middle-range of countries of the EU and lags behind the average growth rate of the Visegrád countries (4.0 per cent).
In 2024 Q4, the volume of new corporate loans, at HUF 920 billion, was down 3 per cent compared to the level of the same period a year earlier. Subsidised corporate loans accounted for only 12 per cent of the volume of newly concluded, non-overdraft forms of credit, falling by 15 percentage points in the fourth quarter relative to the same period of the previous year. Subsidised loans to SMEs accounted for 18 per cent of the total at the end of the review period, down from 40 per cent in 2023 Q4. The average interest rate on new small, variable-rate forint loan contracts, concluded with companies on a market basis, was 9.2 per cent, falling by 77 basis points relative to the third quarter. The average interest rate on new large, variable-rate forint loans was 8.3 per cent at the end of 2024 Q4, rising by 16 basis points. The spread on small-amount forint loans fell by 36 basis points relative to the previous quarter, amounting to 2.5 percentage points in the fourth quarter.
The banks participating in the Lending Survey left standards on corporate loans broadly unchanged in 2024 Q4, and they do not plan to change them over the next six months. In 2024 Q4, a net 29 per cent of the banks perceived a decline in demand for long-term loans. Demand for short-term loans, and forint and foreign currency loans, remained unchanged in the quarter. Looking ahead to 2025 H1, banks expect credit demand to pick up, partly due to the Sándor Demján Programme starting in January 2025, which they expect to be felt in every company size, with demand expected to pick up mainly for forint loans.