National Bank of Hungary Sets High 'Must-Achieve' Targets

  • 19 Apr 2018 8:48 AM
  • Hungary Matters
National Bank of Hungary Sets High 'Must-Achieve'  Targets
An increase in incomes, expanding investments and lending growth are all necessary for Hungary to achieve sustainable convergence by 2030, National Bank of Hungary deputy governor Márton Nagy said at a conference organised by business news site Portfolio.hu.

None of these factors can independently achieve sustainable convergence, he said. Hungarian banks’ total assets need to reach an annual growth rate of 11% by 2030, he said. Corporate lending should grow by an annual 12%, with SME lending climbing 13%; and retail lending has to grow by 15% a year, as the annual increase in home loans reaches 18%, he added.

To achieve this degree of growth, banks need to lend to a broader range of clients and offer cheaper products, Nagy said. Hungary’s economic growth rate must reach 4-4.5% a year by 2030 as productivity improves and the investment rate climbs to 23-25%. Internal savings need to grow and innovation must be placed at the forefront, he said.

By 2030, the banking sector’s total assets should rise to 160% of GDP from 95% at present. Stock of loans to the private sector should climb to 70% of GDP from 32% as home loan stock increases to 30% of GDP from 8%.

Nagy noted that Hungarian households and businesses are less indebted than their peers in neighbouring countries as well as the European Union as a whole. He added that the banking system’s low loan-to-deposit ratio is “unhealthy”.

Nagy urged banks to boost efficiency. Banking sector leaders participating in the conference projected more moderate growth for lenders than the NBH. They also questioned the possibility of lowering costs as long as they must pay the bank levy and the financial transaction duty as well as deal with overregulation.

  • How does this content make you feel?

XpatLoop Media Partner

Hungary Matters

Launched in January 2014, this twice-daily newsletter covers 'everything you need to know about what’s going on in Hungary and beyond', according to its publisher the state media agency MTI. Click the title above for more info, and to subscribe.

Explore More Reports

  • IMF Raises GDP Growth Forecast For Hungary

    IMF Raises GDP Growth Forecast For Hungary

    • 10 Oct 2018 5:59 AM

    The International Monetary Fund (IMF) raised its projection for Hungary’s GDP growth this year to 4% in its fresh World Economic Outlook. The projection was raised from 3.8% in a forecast released in April, but is still under the government’s official target for 4.3% growth.

  • Hungary Prepares To Withdraw Old HUF 1,000 Bills

    Hungary Prepares To Withdraw Old HUF 1,000 Bills

    • 6 Sep 2018 6:40 PM

    The National Bank of Hungary (MNB) issued a reminder on Tuesday that old HUF 1,000 bills, which have been replaced by a new banknote design with enhanced security features, will be withdrawn from circulation on November 1, 2018.

  • NBH Policymakers Keep Base Rate On Hold

    NBH Policymakers Keep Base Rate On Hold

    • 22 Aug 2018 9:58 AM

    The National Bank of Hungary’s Monetary Council decided to keep the central bank’s key rate on hold at 0.90% at a monthly policy meeting. The Council has left the base rate on hold since signalling an end to an easing cycle at a policy meeting in the spring of 2016.