Hungarian banks achieve HUF 155 bln pre-tax profit in H1

MNB

Photo by Jessica Fejos

Hungarian credit institutions had a combined pre-tax profit of HUF 155.0 bln in the first half of 2015 compared to a HUF 294.1 bln loss in the same period last year, fresh data released by the National Bank of Hungary (MNB) today reveal, according to Hungarian news agency MTI.

(Photo: Jessica Fejos)

Interest revenue of the sector was down 20.7% to HUF 380.7 bln in the first six months. Revenue from commissions and fees grew 7% to HUF 236.6 bln.

Operating costs were down about 0.5% at HUF 334.4 bln.

In H1 there were significant changes in provisions and one-off items for lenders because of the program mandating conversion of FX mortgage loans to forints.

Write-offs and provisions resulted in a HUF 468 bln burden in the first half of 2014, but the use of these provisions gave HUF 547.1 bln extra income in H1 2015. This was offset by extraordinary losses jumping from HUF 22.3 bln to HUF 530.6 bln.

Lenders had combined total assets of HUF 32.778 trillion at the end of June, up 1% from the end of 2014. Stock of loans edged down about 3.5% to HUF 15.256 trillion during the period. Stock of deposits decreased 2.3% to HUF 15.583 trillion.

The ratio of non-performing loans – those past 90 days due – to gross loans fell to 16.6% from 19.4% in the retail sector and grew to 13.9% from 13.8% in the corporate sector from the end of 2014 to the end of June 2015.

The NPL ratio was 16.1% for the retail sector and 13.7% in the corporate sector at the end of 2015 Q1. MNB said the lower ratio for the retail sector in Q1 could be attributed to a one-off effect of converting FX loans to forints which was proven to be unsustainable.

The Tier One full capital adequacy ratio of the system was a preliminary 20.6% at the end of June, up from 19.3% at the end of last year.

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