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Bloomberg: Nagy says banking industry’s profits to improve by 2019

Banking

Márton Nagy, Executive Director of the Hungarian National Bank (MNB) says the Hungarian banking industry may break even this year and see earnings comparable to regional peers by 2019, according to an interview Friday.

Despite the banking industry’s difficulties this year, including converting foreign-currency loans to forints and facing a personal bankruptcy law, Nagy said return on equity could rise between 10% and 12% in the coming three to four years. According to data from Bloomberg, this would put Hungary on track to reach levels such as those found in Poland.

Return on equity has been negative in the past four years. Hungarian banks have Europe’s highest banking tax and were forced by the government to reimburse borrowers of foreign-currency mortgages.

Hungaryʼs Prime Minister Viktor Orbán has pledged to gradually lower the bank tax, and the government is expected to cut the special levy to 0.31% of total assets in 2016 from 0.53% this year and will lower the tax further between 2017 and 2019, according to Bloomberg.

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