CEO: Eximbank should not add to accounting of state debt


jessica fejos

Magyar Eximbank only transfers a little more than 8% of its outlays to domestic companies, so its spending should not be considered part of the central government budget, bank CEO Zoltán Urbán said in an interview with state-owned all-news TV channel M1 yesterday. At issue is the accounting used to determine the size of Hungaryʼs state debt.

(Photo: Jessica Fejos)

Eurostat, the statistical office of the European Union, has expressed reservations over the exclusion of Magyar Eximbank from the government sector in Hungary’s latest Excessive Deficit Procedure (EDP) report submitted at the end of March, the Central Statistical Office (KSH) said yesterday, state-owned news agency MTI reported. Including Eximbank in the government sector would raise state debt, KSH noted.

Urbán said Eximbank rejects the reservation by Eurostat over the bankʼs exclusion from the general government on several points: Eximbank does not fit the definition of a “captive financial institution” and three-quarters of its loans go to businesses through commercial banks. 

Urbán told the news channel that lawmakers extended the lenderʼs scope to domestic loans in 2014. 

More than 90% of Eximbankʼs outlays are still export-oriented, Urbán said. About 84% of the bankʼs clients are SMEs, he added. 

Eximbankʼs lending stock reached HUF 720 bln at the end of March. In the first quarter, outlays reached HUF 55 bln and the bank provided HUF 20 bln in guarantees, he said. 

Eurostat has recommended reclassifying Eximbank as a captive financial institution, which does not provide financial services to the general public but invests or lends funds for a limited group of clients for a special purpose.

The Central Statistical Office and the National Bank of Hungary said in a joint statement yesterday that Eximbank is not such an institution, as it “is engaged in actual financial intermediation, it raises funds in the market and offers financing to a broad range of market participants”.

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