Erste Bank Reports 10% Increase in Consumer Loans in Budapest

Published: November 16 2023

Erste Bank has reported a 10% increase in consumer loans in Budapest during the month of October. This growth is significant considering the decline in mortgage loans and the recent recovery of the babymoon loan. The overall operational revenues of Erste Bank in the first nine months of 2023 exceeded the previous year's figures by 56.2%. This growth can be attributed to the increase in fee and commission revenues, as well as the revaluation of supported loans. The changing interest rate environment has had a significant impact on the bank's operational revenues, reducing it last year and increasing it this year.

The issuance of new loans in the first nine months of 2023 fell by 31.9% compared to the previous year, primarily due to a decline in demand for mortgage loans. Specifically, new mortgage loans decreased by 54% compared to 2022. The overall lending for consumer loans decreased by 13%, with a 5% decrease in personal loans and a 34% decrease in demand for the babymoon loan. However, the total amount of consumer loans increased by 5% compared to the previous year.

Erste Bank experienced a 10% increase in new consumer loan disbursements in October compared to the previous month. This positive trend is expected to continue in the last quarter of the year, driven by voluntary interest rate stoppage and increased demand in the housing market. The correction in housing prices and the rise in rental fees are supporting this demand, along with the rush to utilize the babymoon loan before the introduction of the new system next year.

The Erste Group in Hungary managed to increase its domestic retail client assets, including investments and deposits, to HUF 5,156 billion by the end of September. This represents a 10% increase compared to the previous year. Within the category of savings, the proportion of investments increased to 70% from the previous year's 60%, resulting in a significant rise in the number of new investment accounts. The Erste Future investment program saw a 42% growth in the number of clients managing their savings compared to the end of 2022.

The combined bond and loan portfolio in the corporate sector grew by 6.1% in the span of a year and exceeded HUF 1,190 billion by the end of September. The increase was mainly due to the financing of small and medium-sized enterprises and the loans inherited from the acquisition of Commerzbank in 2022. Within the small and medium-sized enterprise segment, the loan and bond portfolio increased by 17%, while it decreased by 7% for trade properties and increased by 8% for large companies and municipalities. The volume of new bonds and loans in the first nine months was 54% lower compared to the previous year, but without the acquisition of Commerzbank, the decline would have been 69%.

Overall, Erste Bank's report on the increase in consumer loans in Budapest reflects positive developments in the lending market. Despite the decline in mortgage loans, the bank remains optimistic about the future, expecting further growth in new loan disbursements. Additionally, the popularity of investments and the success of the Erste Future investment program demonstrate the growing interest in financial planning and long-term savings among retail clients. The positive results in both consumer and business loans further highlight Erste Bank's prominent position in the Hungarian financial sector.

What did the Erste Bank report about consumer loans in Budapest? The Erste Bank reported a 10% increase in consumer loans in Budapest.

What is the inflation rate in Budapest in October? The inflation rate in Budapest in October was just under 10%.

Which type of loans showed the greatest improvement this year in Hungary? Personal loans performed the best in Hungary in the first nine months of this year.

How much did Erste's operating income increase in the first nine months of 2023 compared to the previous year? Erste's operating income increased by 56.2% in the first nine months of 2023 compared to the previous year.

What contributed to the significant increase in Erste's operating income? The significant increase in Erste's operating income was attributed to the growth in fee and commission income, as well as the revaluation of supported loans. Additionally, the change in interest rates had a significant impact on the operating income.

How much did Erste's operating result increase to in 2023? Erste's operating result increased to 150.4 billion forints in 2023, compared to 67.4 billion forints in the previous year.

What was the after-tax profit of Erste in 2023? The after-tax profit of Erste in 2023 was 89.9 billion forints.

How did the issuance of new mortgage loans change in Hungary compared to the previous year? The issuance of new mortgage loans in Hungary decreased by 54% compared to the previous year.

How did the demand for consumer loans change in Hungary in 2023? The overall issuance of consumer loans in Hungary decreased by 13% compared to the previous year. Personal loans decreased by 5%, while the demand for the "babaváró" loan decreased by 34%.

What was the percentage increase in Hungary's total household debt compared to the previous year? Hungary's total household debt increased by 5% compared to the previous year.

How did Erste's managed household client assets change in 2023 compared to the previous year? Erste's managed household client assets increased by 10% in 2023 compared to the previous year.

What percentage of savings are invested by Erste's managed household clients? Within the savings, 70% is invested by Erste's managed household clients.

How many new investment accounts were opened since June? Since June, the number of newly opened tbsz accounts has tripled.

What contributed to the growth of Erste's corporate bond and loan portfolio? The growth of Erste's corporate bond and loan portfolio was due to the financing of small and medium-sized enterprises as well as the acquisition of loans from Commerzbank.

What was the change in the loan portfolio of small and medium-sized enterprises in the first nine months of 2023? The loan portfolio of small and medium-sized enterprises increased by 17% in the first nine months of 2023.

What was the change in the loan portfolio of commercial real estate in 2023 compared to the previous year? The loan portfolio of commercial real estate decreased by 7% in 2023 compared to the previous year.

What was the change in the loan portfolio of large enterprises and municipalities in the first nine months of 2023? The loan portfolio of large enterprises and municipalities increased by 8% in the first nine months of 2023 compared to the previous year.