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Banks to wind up loan refinancing by next fall

MNB

Hungarian banks could wind up the process of refinancing retail clients' loans to reflect compensation paid under borrowers' relief legislation and the conversion of foreign currency-denominated loans into forint ones by September or October of next year, the head of the Hungarian Banking Association said on public radio today.

 

Hungarian banks are preparing to compensate borrowers for using exchange rate margins when calculating repayments on FX loans and for making unilateral changes to FX and forint loan contracts, as stipulated in the legislation approved in the summer. They are also at the start of the process of converting retail FX mortgages into forint ones in an effort coordinated by the government.

Levente Kovács said conforming to "fair banks" rules the government will soon introduce and converting retail FX stock at the same time would be advantageous. Banks could get back to business as usual from Q4 2015, he added.

Borrowers who never missed a payment and who earlier joined an exchange rate cap scheme will be "the best off" when FX loans are converted into forints, Kovács said on public television late yesterday.

Hungary's government has said the FX loans will be converted at market rates and that the conversion will be practically mandatory.

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