Banking Sector in a Difficult Situation, Says Csányi

Banking

Sándor Csányi

I feel that not everyone in a position managing the economy sees clearly that the banking sector is in a difficult situation, its profitability is low, and it is not worth investing here, OTP chairman-CEO Sándor Csányi said on Thursday at an economics conference, according to a report by state news wire MTI.

"I do not think that those who invested money here to compensate for the 2008 crisis will do so again. We are here, we cannot leave, it would even be favorable for me if some banks left the country, but not for the economy," Csányi said.

Csányi said that just like FX loans, forint loans also have risks, and he indicated that the introduction of price caps is not a solution, nor is it sustainable that certain sectors do not repay their loans. 

Some government measures, such as special levies, cause domestic financial institutions a competitive disadvantage, which has an adverse effect on economic actors and borrowers, and the unpredictability of the legal system is also a source of problems, he said.

Csányi said Hungary greatly needs funding from the European Union and the government is doing everything to reach an agreement with the EU. He said it would be a big problem if a funding agreement would not be reached by the end of the year as the lack of EU funds could reduce economic growth, increase CDS spreads, and put further pressure on the forint.

OTP Group played a leading role in almost all areas in the region in 2021, it will survive the current difficulties and will come out of the situation stronger, but it is not good for the Hungarian economy that the lending capacity of the banking sector is shrinking, he said.

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