Hungary banking sector earnings fall on impairment
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The combined after-tax profit of Hungary's banking sector fell 43.9% to HUF 390 billion last year as pandemic provisioning weighed, data released by the National Bank of Hungary (MNB) on Thursday show, according to a report by state news wire MTI.
Net interest revenue increased 10.4% to HUF 1.411 trillion and net revenue from commissions and fees edged up 1.4% to HUF 827 bln.
Impairment and provisions came to HUF 399 bln, swelling from HUF 103 bln in the base period.
The sector's return on assets fell to 0.6% from 1.4%. Return on equity dropped to 6.5% from 13.1%.
At the same time, banks' cost-to-income ratio declined to 63% from 64.6%.
Balance sheets expand
Total assets of the banking sector stood at HUF 60.609 tln at the end of 2020, up 22.5% from 12 months earlier.
The lending stock increased 22.7% to HUF 38.16 tln. The stock of deposits rose 25.3% to HUF 49.644 tln.
Lending portfolio quality improved as the non-performing loan ratio fell to 3.6% from 4.1%.
Hungary's government introduced a blanket moratorium on loan repayments early in the coronavirus crisis. That moratorium is set to expire at the end of June.
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