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Hungarian financial system stable, capital position solid, says PSzÁF chief

Hungary's financial mediation system maintained its stability, its capital position was solid and growth of lending stock slowed or stopped; at the same time the number of loss-making financial institutions rose, according to a fresh report on the sector's operation and risks by financial market regulator PSzÁF.

Performance of financial institutions declined and a deterioration in portfolio quality forced lenders to make big write-offs, said PSzÁF chairman Ádám Farkas. At the same time, the capital market stabilized and even picked up, he added.

Portfolio quality is expected to deteriorate further together with profitability in 2010, Farkas said. A turn-around can only be expected after a pick-up, and the outlook for this is extremely uncertain, he added. (MTI-Econews)