Moody’s: Improved employment, higher real wages positive for banks
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Lower unemployment, higher employment and rising real wages should positively impact Hungaryʼs banking sector, ratings agency Moodyʼs said in an analysis yesterday, according to Hungarian news agency MTI.
Higher real wages is credit positive for banks because it enhances householdsʼ ability to service their bank loans and will help reduce banksʼ non-performing retail loans, Moodyʼs said.
The NPL ratio in the local banking sectorʼs retail portfolio stood at 17.3% of gross loan stock in March, it noted.
Higher employment will positively affect domestic demand, revive retail lending and support revenue growth, Moodyʼs said.
Moodyʼs expects the asset quality of FHB Mortgage Bank, Budapest Bank and OTP Bank to benefit the most from the improvement in real wages.
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