M&A Activity Impacts Banking Sector Profit

Banking

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First-half net income of Hungarian banks jumped 333% year-on-year to HUF 978 billion, lifted by the impact of a merger and an acquisition, data released by the National Bank of Hungary (MNB) on Monday show.

M+A activity impacts banking sector profit (adds balance sheet)

The central bank and financial market watchdog noted that two "large-scale" lenders had merged during the period, and the pre-merger profit of the one bank had become part of the other's equity. A foreign acquisition of a Hungarian banking group also had a "significant" one-off effect on the sector's earnings, it added.

The merger of MKB Bank and Takarékbank bank closed on April 30, creating Hungary's second-biggest commercial lender.

OTP Bank closed the acquisition of Nova KBM, the second-biggest lender in Slovenia, in February.

MNB data show lenders' net interest revenue climbed 51% to HUF 1.584 trillion in H1. Net revenue from commissions and fees rose 24% to HUF 644 bln.

Hungarian banks had combined total assets of HUF 85.221 tln at the end of June, 12% more than 12months earlier. Lending stock fell 3% to HUF 48.003 tln. The stock of deposits increased 7% to HUF 66.03 tln.

Lenders' NPL ratio stood at 2.8% at the end of the first half, down from 3.5% a year earlier.

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