The National Bank of Hungary (MNB) published its Financial Stability Report, finding that the banking system remained well capitalised and liquid in 2025 H1, with credit risks moderate and non-performing loans at a historically low level. The report flags rising mortgage market risks linked to rapid house price growth and sets out the MNB’s macroprudential response, including changes to the systemic risk buffer framework. Bank profitability remained high, with a 12-month rolling return on equity of 19.1% in June 2025, supported by net interest income and minimal loan-loss impacts. The capital adequacy ratio stood at 20.7% at end-June 2025, implying a free capital buffer of more than HUF 2,300bn. Liquidity indicators remained strong, including operational liquidity reserves above HUF 21,000bn and an average liquidity coverage ratio of 168% at end-September, although liquidity in central bank reserve accounts fell by around HUF 1,300bn between April and October due mainly to maturing long-term central bank loans. On the credit side, household lending continued to grow strongly with household loans up 11.7% year on year and the housing loan portfolio up nearly 15%, while corporate lending remained subdued with a 2% year-on-year increase; the government’s Home Start subsidised housing loan programme launched in September 2025 is expected to further lift housing and credit demand. Preliminary data showed nominal house prices rising 23.9% year on year nationwide in 2025 Q3, with prices assessed as above levels justified by fundamentals, increasing correction risk and potential collateral valuation impacts. From January 2026, the MNB will replace the current systemic risk buffer requirement with two sectoral systemic risk buffers of 1% each for exposures to Hungarian customers backed by domestic residential and commercial real estate.

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