Diákhitel Központ reports losses of Ft 30 mln in 2005
Friday, February 10, 2006, 17:28
State-owned student loan provider Diákhitel Központ (DK) had losses of Ft 30 million in 2005, an improvement from losses of Ft 42million the year before, according to DK's annual report, prepared with Hungarian Accounting Standards.The losses did not come from DK's lending activities, DK spokesman András Ori said, rather they were the result of accounting and tax requirements. He added that DK had to pay Ft 13 million in "innovation" taxes last year. DK's total assets increased 44.5% to Ft 122.929 billion in 2005. DK had loan contracts with 205,000 students at the end of 2005, 26,000 more than a year earlier, and its stock of loans rose Ft 27.312 billion to Ft 107.736 billion. Last year, DK issued bonds worth Ft 27 billion to finance its lending. It also repurchased Ft 13.208 billion worth of bonds before maturity on four occasions to manage liquidity. DK's total outstanding stock of bonds increased from Ft 63.5 billion at the end of 2004 to Ft 77.3 billion at the end of 2005. DK was also able to draw on a €100 million credit line from the European Investment Bank (EIB) and another credit line from the Hungarian Development Bank (MFB) Rt. DK had risk provisions of Ft 4.34 billion at the end of 2005, compared to Ft 2.44 billion a year earlier. DK said just 2% of its70,000 clients who have started paying back their loans have been reported to the tax office for failing to make repayments. DK had net assets of Ft 2.297 billion at the end of 2005, down 1% from a year earlier. Students were eligible to receive Ft 150,000 per semester last year from Diákhitel. Graduates who find employment are required to pay back a monthly 6% of the minimum wage, equivalent to Ft 3,420 last year. After two years, they must pay a monthly 6% of their average monthly wage from two years earlier.