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Patai sees profitable year for Hungarian banks

Hungarian banks are expected to see “another” profitable year in 2017, Hungarian Banking Association Chairman Mihaly Patai, who is also the head of UniCredit Hungary, told Reuters in an interview on Thursday.

“I am not saying we are set for seven years of prosperity, but this year [2016] we have embarked on a course of normalcy and this will continue next year [2017],” wire service Reuters cited the chairman as saying. He added that hat the sector could post an average return on equity of 6-7% in 2017, Hungarian news agency MTI reported about the Reuters interview.

Profits would be lower because one-off factors, such as the large-scale release of provisions linked to problematic foreign currency loans, would not be repeated next year, Reuters reported the chairman as saying.

Patai noted that about six banks in Hungary are preparing to sell hundreds of millions of euros worth of such assets to foreign players, including American investors, who stayed away from the local market during a previous real estate boom in the past decade, according to MTI.

“This will highly improve the 2017 quality indicators of the banking system,” Patai said, according to MTI, and noted that the deals could cut the local retail non-performing loan rate to 12-13% from the current 18%.