'Bad bank' to be set up in Hungary by fall
Hungary plans to set up a "bad bank" to isolate lenders' non-performing loans in fall, National Bank of Hungary (MNB) managing director Márton Nagy told international news agency Reuters in an interview published yesterdayday.
"The bad bank will be formed by the fall, in September or October. It will primarily buy commercial real estate loans and the foreclosed real estate behind them," Nagy told Reuters. He told Reuters that about HUF 510 bln of banks' commercial real estate portfolio was non-performing, but some HUF 300 bln more was restructured and "masked a large number of problematic deals".
Nagy said the price of the assets would depend on whether the lender had entered the real estate loans on the books at a "correct price". "There will be different prices for each deal where it will be worth selling, but one thing is for sure. Transactions will take place at the real market value, which will force the banks to realise their losses, because this will be below book value," he said.
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