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Credit institutions lose HUF 78 bln in Q4

  Banks, mortgage credit institutions and home-savings banks lost HUF 78 billion during the Q4 of 2008, thereby reducing their annual after-profit to HUF 303 billion (€1 billion), Hungary’s financial market watchdog PSzÁF published on its website on Monday.

The banking sector’s 2008 profit dropped HUF 21.7 billion, or 6.6%, from HUF 324.7 billion in 2007. However, not counting the HUF 121.4 billion for which OTP Bank sold its insurance unit, OTP-Garancia, credit institutions posted 2008 profit of only HUF 181.8 billion, down 44% from 2007. Combined total assets were up 19.9% to HUF 29,221.9 billion in 2008 compared to 2007.

Capital conditions of credit institutions remained stable, with capital adequacy ratio at 11.06% at the end of 2008 according to previous data, practically unchanged from 11.01% in 2007.

Banks’ combined gross stock of loans was up 21.2% to HUF 20.229 billion, while deposits rose only 13.6% to HUF 12.211 billion in the twelve months to December 31, 2008. The stock of corporate loans increased 9.2% to HUF 7,168 billion, while the stock of retail loans grew 33% to HUF 7,525 billion.

Combined foreign assets were up HUF 925 billion, or 61%, and accounted for 12% of the total stock of loans at the end of 2008. In the case of retail loans, the stock of forint-denominate loans decreased 3.2%, while forex loans increased 58% in 2008. About 70.2% of retail loans were foreign-currency denominated in 2008, compared 59% a year earlier.

The share of forex assets rose to 58.8% within total assets from 49.4% in the twelve months to December 31, 2008. The combined stock of forint deposits increased 11.8% to HUF 944 billion, including a 16.7%, or HUF 712 billion, rise in retail forint-deposits.

The stock of foreign-currency denominated deposits grew 7.6% to HUF 160 billion, of which retail deposits accounted for HUF 137 billion. Corporate deposit stock was up 2.1% to HUF 3,446 billion in 2008.

Foreign sources of financing rose 43% to HUF 8,944 billion, accounting for 30.6% of total sources in 2008, up from 25.6% in 2007. Banks’ portfolios deteriorated in 2008, when the ratio of problematic loans increased to 10.05% from 7.9% the previous year.

Combined interest revenue rose 32%, and interest expenses increased 52%, therefore net interest revenue showed a 1% annual rise and reached HUF 724.7 billion in 2008 according to preliminary figures. Non-interest revenue decreased 8.5% to HUF 240.5 billion, while operating costs were up 8% to HUF 634.4 billion.

Direct foreign ownership in the banking sector increased to 86.44% in 2008 from 81.97% in 2007, direct domestic ownership increased to 12.39 from 12.28. Preference, redeemed and unidentified shares accounted for 1.17%, down from 5.75% in 2007. (MTI-Eco)