Report: FX refunds to increase banks' payroll costs

Telco

The process of paying compensation to clients under borrowers' relief legislation approved this summer will create "hundreds of millions of forints" of additional payroll and IT costs for banks, the head of the Hungarian Banking Association told MTI yesterday.

The process of compensating clients will take about nine months and require the banking sector's full capacity, said Levente Kovács. Banks will only be able to look toward the future and start portfolio-building in the "new era" after the process is complete, he added.

Banks are expected to refund retail clients approximately HUF 1 trillion under the borrowers' relief legislation for using exchange rate margins when calculating repayments on foreign currency-denominated loans and for making unilateral changes to contracts.

Banks expect the planned conversion of FX loans into forints to take place at market rates, Kovács added.

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