Hungary banking system stable

Hungary’s banking system is highly resilient to shocks and the financial institutions are stable even in the face of recent bank crises, the National Bank of Hungary said in a report published on Thursday.

Speaking at an online press conference, central bank official Bálint Dancsik said the ratio of the Hungarian banks’ liquid assets, structure of financing, capital adequacy and credit portfolio are substantially better than during the 2008 crisis.

One of the main sources of danger is the decline in risk tolerance: if the risks of American banks were realised to a greater extent, there would be global effects, which Hungary would not be exempt from either, he said.

Corporate lending increased by 14 percent last year, but its pace gradually slowed over the course of the year, he said.

Dancsik said demand for short-term and FX loans was up, adding, at the same time, that banks had confirmed to the NBH that conditions for taking out FX loans had been tightened.

Meanwhile, he said the volume of household loans declined by 10 percent last year, a trend which has continued into 2023.

The banking sector’s profits came to HUF 485 billion (EUR 1.3bn) in 2022 as against 510 billion in 2021, Dancsik said.

Source: MTI