August 29, 2013 / 12:07 PM / 4 years ago

Hungary corporate lending shrinks in Q2 despite rate cuts -cbank

BUDAPEST, Aug 29 (Reuters) - Outstanding loans to Hungarian companies fell 6.4 percent in annual terms in the second quarter of the year despite a significant decline in interest rates, the central bank said in its lending survey on Thursday.

The bank has cut its base rate by a total of 320 basis points to 3.8 percent since last August, and lending interest rates tracked the fall, but commercial banks have not eased other conditions for borrowers, the survey said.

“Any major improvement in the trends in lending would require permanent and large-scale easing of conditions, which is prevented by banks’ cautious behaviour,” the bank said.

“Overall, due to tight non-price conditions, only a limited range of companies can benefit from favourable interest rate conditions,” it added. (Reporting by Sandor Peto)

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