By Margit Feher
BUDAPEST--Four banks have cornered about one third of the cheap
funds offered by the Hungarian central bank under its Funding for
Growth program to help the government inject pace into the insipid
recovery by stepping up lending, online business news agency
Portfolio said Wednesday.
Portfolio approached all 36 banks for data on how much money
they have received from the central bank, but only K&H Bank
Zrt., a local unit of Belgian bank KBC Group NV (KBC.BT), MKB Bank
Zrt., the Hungarian unit of Germany's Bayerische Landesbank AG,
UniCredit Zrt., a unit of UniCredit SpA (UCG.MI), and Volksbank
Zrt., the local arm of Russian OAO Sberbank (SBER.RS), participated
in the survey and supplied the data.
The remaining banks declined to divulge the information saying
it was confidential, according to the report.
The National Bank of Hungary had a total of 750 billion forints
($3.35 billion) on offer to retail banks under its growth-promoting
scheme. It raised the amount by half in May due to high initial
demand from the banks for the zero-interest funds. The central bank
may extend the three-month scheme, which launched June 1, if it
proves a success, central bank officials have said.
The retail banks are to use the central bank money to provide
loans to small firms at a low, maximum 2.5% annual interest, and
also to help them convert their expensive foreign-currency loans
into less risky forint loans.
The central bank granted HUF95 billion to K&H Bank, HUF82
billion to MKB Bank, HUF46 billion to UniCredit, and HUF20 billion
to Volksbank, accounting when combined for 32% of the total amount
of funds available, the banks told Portfolio.
Low levels of investment and deteriorating competitiveness are
constraining Hungary's growth, forecasting firm Moody's Analytics
said Wednesday, while revising its 2013 forecast for Hungary to a
contraction of 0.3% from its earlier view for a 1.8% drop. In
contrast the government forecasts the economy will expand this year
by 0.7%.
Hungary's economy expanded at a faster-than-expected 0.7% in the
first quarter from the previous quarter.
Write to Margit Feher at margit.feher@dowjones.com