Hungary’s Banking Industry Loss Narrows to $716 Million in 2012
Hungary’s banking industry remained unprofitable in 2012 as lending fell, bad loans increased and the government kept a special bank tax, the country’s financial regulator said.
The industry’s combined loss narrowed to 159.1 billion forint ($716 million) from 211.1 billion forint in 2011, according to data published on the regulator Pszaf’s website today.
Hungarian banks, straddled with the highest bank tax in Europe, cut lending as the economy fell into a second recession in four years and investments plunged. Total loans shrank 12 percent in 2012 and bad debt accounted for 13.8 percent of total lending at the end of last year, according to the survey.
Bad loans accounted for 16.2 percent of lending to households, rising 50 basis points over the previous year and are set to increase further this year, the watchdog said.
OTP Bank Nyrt. (OTP) is the country’s largest lender, whose main competitors are Italy’s Intesa Sanpaolo SpA (ISP) and UniCredit SpA (UCG), Austria’s Erste Group Bank AG and Raiffeisen Bank International AG. (RBI)
The government is in talks with banks to boost lending in exchange for lower special tax payments, Gyula Pleschinger, state secretary at the Economy Ministry said Feb. 17. The country’s commissioner for financial rights Gyorgy Doubravszky will propose a “breakthrough” solution to lower the ratio of non-performing foreign-currency mortgages, which won’t rely on state resources, Doubravszky told news website Origo on Feb. 20.
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