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Bank branches H1 profits climb as other banks' profit slips

First-half pre-tax profit of Hungarian branches of foreign-owned parents climbed in H1 even as profits of banks limited by shares fell slightly, fresh data published by financial market regulator PSzÁF show.

Pre-tax profit of bank branches rose 12.5% to HUF 16.1 billion from the same period a year earlier, the data show. At the same time, pre-tax profit of banks operated as independent entities edged down 0.3% HUF 161.7 billion.

Branches' pre-tax profits accounted for 9.1% of the banking sector's total pre-tax profits in H1, up from 8.1% in the same period a year earlier.

Banks based in other European Union member states are not required to set up a separate unit to do business in Hungary, rather they can operate as a branch. AXA Bank Europe, Banco Primus, BNP Paribas, BNP Paribas Securities, Citibank Europe, Cofidis, Credit Agricole Corporate and Investment Bank, ING Bank and Oberbank all have branches in Hungary.

Branches' net interest income climbed 10.1% to HUF 42.8 billion in H1 from the same period a year earlier. Net income from commissions and fees rose nearly one-third to HUF 7.5 billion.

Writeoffs and risk provisions made in H1 2011 dropped 40% to just over HUF 3 billion.

Branches' corporate lending stock fell 5.7% to HUF 401 billion at the end of June from the end of 2010. Stock of both forint and foreign currency-based loans fell after rising in H2 2010.

Corporate loans accounted for 34.6% of their total HUF 1,161 billion lending stock at the end of the period.

Branches' retail lending stock inched down 0.5% to HUF 557 billion at the end of June from the end of 2010. Forint lending stock rose, while foreign currency-denominated stock dropped.

Retail loans accounted for 48.0% of branches' lending stock at the end of the period.

Branches' loans to foreign clients increased 1.6% to HUF 142 billion. These loans accounted for 12.3% of branches' total lending stock.

The PSzÁF data for banks operated as independent entities do not include the Hungarian Development Bank (MFB), Eximbank or clearing house KELER.