Hungary's CIB to suspend Swiss franc lending-paper

BUDAPEST, Oct 29 (Reuters) - CIB Bank, the Hungarian unit of Italy's Intesa Sanpaolo ISP.MI, will suspend issuing loans denominated in Swiss francs as of Oct. 30, business daily Napi Gazdasag reported on Wednesday.

The bank declined to comment.

Similar decisions have already been taken by several other banks operating in Hungary which have suspended or imposed restrictions on foreign currency borrowing amid the global credit crunch.

Nearly 90 percent of new household loans in Hungary this year were made in foreign currencies and analysts said a limitation on such lending could sharply slow banking activity.

Over half of bank lending to the private sector is in foreign currencies.

MKB Bank, the Hungarian arm of Bayerische Landesbank BLGGgg.F, was the first to suspend the issuance of foreign currency loans earlier this month.

Since then Raiffeisen Bank, a unit of Raiffeisen International RIBH.VI, has also suspended extending Swiss franc-based mortgage loans to new retail customer applicants, and other banks tightened conditions. (Reporting by Krisztina Than; Editing by Greg Mahlich)