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Banks seen diving into loss-making

Following the ratification of a serious tax on the finance sector, the bank association fears that several players will have to concede a loss-making 2010, even though they will not question the legitimacy of the act.

The banks are going to pay, they will not challenge the bill on constitutional grounds, head of the bank association Tamás Erdei told the public radio. Nonetheless, he added that 2010 will be a “dramatic” year for Hungary’s banking system

“The economic crisis has already reached Hungarian families and businesses, which has seriously influenced banks’ lending policies. This is compounded with this gigantic tax,” he said.

The ratification of the HUF 200-billion finance sector tax will mean that six to ten middle and major banks in Hungary will end the year in the red and banks’ lending in general will be greatly reduced Erdei said. (BBJ)