Private banking is rapidly expanding as rich Hungarians are getting richer. It is estimated that 700 Hungarians have a wealth above EUR 10 million, business daily Világgazdaság reports.
The number of premium clients with savings in the tens of millions of forints is growing in Hungary, according to a new study by local financial advisory BloChamps Capital. At OTP Bank, Hungaryʼs leading commercial bank, more than 40% of the retail savings increase in 2017 came from the growth in private banking savings, Világgazdaság reports.
Compared to other countries, the rich in Hungary are not many, with an estimated 600-700 people having personal wealth above EUR 10 million. Within these, there is a group which has grown rich very rapidly by exploiting mainly political ties to do business. Although the media tends to focus on just a few people in this group, the study indicates that those getting rich through political contacts number around 1,000 in Hungary.
The number of private banking accounts is around 40,000 in Hungary, with savings usually in the HUF 30-50 million range, or HUF 100 mln maximum. Total savings held in private banking accounts amounted to HUF 4.135 trillion in 2017, says Világgazdaság.
Interest rates are low, which makes savings grow only slowly, but most of the wealthy are not taking their money abroad, as they did back in 2012, notes the report. Because of the tax system, keeping money in Hungarian banks is now more attractive, it adds.