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Banks see no major problems as exchange rate scheme concludes

Hungarian banks told state news agency MTI Wednesday that they see no signs of widespread problems with borrower repayments as an exchange rate cap scheme introduced five years ago by the National Bank of Hungary (MNB) winds up.

The scheme allowed borrowers with foreign currency loans to cap their repayments based on a set exchange rate. The difference between the set rate and the market rate was placed on a separate account for repayment up to five years later. Interest costs on the separate account were covered in equal part by the banks and the state during the period.

Based on earlier comments by MNB Spokesman István Binder, the loan repayment installments of some 59,000 borrowers could rise by an average HUF 7,000 as the scheme winds up.

K&H Bank said around 17,000 of its clients are affected, representing an exposure of HUF 107 billion.

CIB Bank said 8,000 of its loan contracts are involved and installments could rise in some 45% of cases.

Raiffeisen Bank said it has 4,700 clients who were part of the exchange rate program.

UniCredit Bank said the changes should result in installments rising by an average HUF 6,500 for a little more than 2,000 of its clients.

Citing banking secrecy rules, MKB Bank did not reveal figures for the number of its clients affected.

OTP Bank said its clients represent around 20% of all banking clients who took part in the scheme.