MNB: NET pricing policy needs rethink

Competition

The operation of Hungary's National Asset Management Company (NET), established to buy the homes of troubled borrowers and allow them to stay as renters, needs a rethink, National Bank of Hungary (MNB) managing director Márton Nagy said in an interview published in daily Magyar Nemzet on Saturday.

Data suggest banks are not using the capital freed up as a result of NET's purchases for lending, Nagy said, adding that NET's pricing policy needs to be re-examined.

Hungary's corporate lending stock should grow by at least 4-5% a year if the country's growth rate is to remain over 3%, he said.

He made an argument for concentration of the market, saying that in a country the size of Hungary, banks with a market share of less than 15-20%, except for those in specialized areas, could not operate efficiently and earn an honest profit. More banks could leave the country, after which real competition can start among the remaining players, he said.

Nagy said the state's strategy of acquiring banks had accelerated the reorganization of the market. These banks could be sold later to domestic private individuals or to private investors, he added.

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