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Banking sector profits fall in Q1 as operating costs climb

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Hungarian banksʼ combined after-tax profits fell 9% year-on-year to HUF 175 billion in the first quarter as operating costs jumped, fresh data released by the National Bank of Hungary (MNB) show, according to Hungarian news agency MTI.

Net interest revenue dropped 8% to HUF 197 bln, but net revenue from commissions and fees rose 13% to HUF 125 bln.

The bottom line was also lifted by a reduction in the bank levy. The "other non-interest revenue" line in the MNB data, which shows the impact of the bank levy, was negative HUF 33 bln in Q1, a big improvement over the negative HUF 103 bln in the base period.

A 43% increase in operating costs to HUF 234 bln weighed on earnings.

Total assets of the sector stood at HUF 34,587 bln at the end of March, up 4% from twelve months earlier.

The gross lending stock rose 4% to HUF 17,948 bln. The corporate lending stock was flat at HUF 5,987 bln, while the stock of retail loans fell 3% to HUF 5,645 bln.

The stock of client deposits rose 8% to HUF 18,728 bln.

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