Profits of Hungarian banks jump 50% in 2017

Telco

After-tax profits of Hungaryʼs banking sector climbed 50% to HUF 632.4 billion last year, lifted by higher revenue from commissions and fees, freed-up risk provisions and the lower corporate tax rate, according to data released by the National Bank of Hungary (MNB) on Wednesday, summarized by state news wire MTI.

The sectorʼs net interest revenue edged down 1% to HUF 775.2 bln. At the same time, net revenue from commissions and fees rose 5% to HUF 512.4 bln. Banks released HUF 187.9 bln of provisions during the period, up from just HUF 10.2 bln in 2016. 

Total assets of the bank sector stood at HUF 36.354 trillion at the end of last year, up 6% from January 1, 2017. Net assets were up 12% at HUF 4.188 tln during the period. 

The MNB noted that it made the comparison from the start of the year, rather than the end of 2016, because of the switch by 14 lenders from Hungarian Accounting Standards (HAS) to International Financial Reporting Standards (IFRS) from January 1, 2017.

The net lending stock increased 8% to HUF 18.127 tln during the period. The corporate lending stock rose 13% to HUF 6.175 tln, while the retail lending stock was up 5% at HUF 5.353 tln.

Lendersʼ deposits with the central bank fell 50% to HUF 968.7 bln because of measures by the MNB to shift the sectorʼs liquidity out of such instruments.

The stock of corporate deposits in the bank sector rose 14% to HUF 7.527 tln, while the retail deposit stock was up 5% at HUF 7.738 tln.

The MNB also noted that the ratio of non-performing loans (NPLs) in Hungarian lendersʼ portfolios fell to 6.6% at the end of December, down from 10.0% on January 1. The ratio in the corporate portfolio dropped from 12.8% to 7.2%, while the ratio in the retail portfolio declined from 14.9% to 10.9%.

In addition to loans over 90 days past due, the NPL ratio includes exposure to assets where it is assumed borrowers will not be able to repay their debt without the sale of the collateral on their loans. The ratio of only those loans over 90 days past due fell to 3.7% during the period, down from 5.6%.

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