Profits of Hungarian brokerages soar in 2017
Investment services companies closed the year 2017 with combined net profit of more than HUF 6 billion, some 50% more than the preceding year, fresh data from the National Bank of Hungary (MNB) reveal. At the same time, costs increased more rapidly than revenues, noted a report by business news portal vg.hu.
Similarly high profit was last seen in the sector prior to the introduction of the special tax on financial institutions, noted vg.hu.
The report points to several factors behind the increasing profit. On the one hand, the market continued to be consolidated last year, with numerous smaller, loss-making brokerages shutting up shop, while the remaining major players proved profit-making.
At the same time, turnover increased amid a low interest rate environment and rising stock exchange activity luring many more small investors to the equity market.
Revenues across the investment services sector swelled to HUF 38.68 billion, an increase of some 21% on 2016, and the second highest figure of all time. The record was in 2014, vg.hu recalled, when brokerages cashed in to the tune of over HUF 40 bln.
Less encouraging news was that expenditures of investment services firms have been growing at a more rapid pace than revenues, amounting to over HUF 18 bln in 2017, around a third more than the preceding year. Among reasons for this, vg.hu cited supervisory expectations, continuous IT developments, and the costs of preparations for implementation of the updated Markets in Financial Instruments Directive (MiFID II) from January 3, 2018.
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