“We have decided to establish our own mortgage bank and it was also something of an expectation of us that given our position in the retail sector, this should be the way forward,” Baba told Reuters.
The new unit could cost between several hundred million to one billion forints, she added.
K&H could issue HUF 50 bln-90 bln of bonds, she said, adding that the lenderʼs mortgage outlays had reached more than USD 40 bln in January-July.
The National Bank of Hungary is requiring lenders to back at least 15% of their net mortgage loans with long-term liabilities from October 1, 2016, a measure that is expected to spur the establishment of more mortgage banks.
At present, there are only three Hungarian lenders with mortgage units, OTP, UniCredit and FHB, but Erste recently announced it is also establishing its own mortgage bank.
Baba told Reuters there could be a third new player, “but we think that three new participants is what the system can cope with”.
Producing journalism that is worthy of the name is a costly business. For over 30 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.
