MNB says Hungary banking sector “stable", resilience “adequate”
Hungary's domestic financial sector is “stable” and its resilience to shocks is “adequate,” the Monetary Policy Council of the National Bank of Hungary said on Tuesday, summarizing the central Bank's fresh Report on Financial Stability. The Council said that the capital adequacy ratio of the Hungarian banking sector is almost 16% -- “high by international standards” -- and just three bigger banks would need capital injections in an adverse macroeconomic and financial market scenario. “The foreign owners of these banks have already proven their commitment to their Hungarian subsidiaries through capital injections to offset losses,” it added. The MNB staff said in the report that the banking sector's losses in 2012 were only partly offset by capital increases implemented so far. As a result, the sector's capital position and capacity to absorb shocks has "weakened markedly". The staff also noted the three banks that will need capital over the two-year horizon -- without naming the banks -- but said the banking sector's total capital requirement of HUF 62 billion is "manageable", especially considering parent bank's earlier commitment to their units.
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