K&H Bank expects 10% of retail clients to avail of state assistance program

MNB

K&H Bank, the Hungarian unit of Belgium's KBC, expects about 10% of its 130,000 clients with foreign currency-denominated mortgages to avail of a state assistance program expected to ease the burden of repayments, K&H Bank deputy-CEO Agnes Baba told MTI.

The assistance program, launched on Friday, fixes the exchange rate for repayments on the loans and puts the difference between that fixed rate and the market rate on a separate forint account to be repaid later. The program's rate for Swiss franc-based loans -- once the most popular lending product in Hungary -- is 180 forints to the franc, well under the market rate of around 250 on Friday.

K&H Bank has offered to restructure the loans of clients struggling with repayments on foreign currency-based loans since February 2009, Ms Baba said. About 12% of the 130,000 clients had restructured their loans by the end of March. Of these, 18% could still not make their repayments.

K&H Bank's non-performing loan ratio in its retail portfolio was 9.25% at the end of Q1.

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