'Bad bank' to be set up in Hungary by fall
Hungary plans to set up a "bad bank" to isolate lenders' non-performing loans, National Bank of Hungary (MNB) managing director Márton Nagy told international news agency Reuters in an interview published yesterday.
"The bad bank will be formed by the fall, in September or October. It will primarily buy commercial real estate loans and the foreclosed real estate behind them," Nagy told Reuters. He told Reuters that about HUF 510 bln of banks' commercial real estate portfolio was non-performing, but some HUF 300 bln more was restructured and "masked a large number of problematic deals".
Nagy said the price of the assets would depend on whether the lender had entered the real estate loans on the books at a "correct price". "There will be different prices for each deal where it will be worth selling, but one thing is for sure: Transactions will take place at the real market value, which will force the banks to realise their losses, because this will be below book value," he said.
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 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.