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Government to set up fund for non-performing mortgages

Government to set up fund for non-performing mortgages

Budapest, May 31 (MTI) – Hungary’s government plans to set up a housing fund for banks to place some of their non-performing mortgages, Economy Minister Mihály Varga told the Reuters Eastern Europe Investment Summit.

“This would improve banks’ balance sheets, and would allow smaller provisions and increased lending,” Varga told Reuters in an interview.

He said 40,000-50,000 mortgages could be placed in the fund, adding that details would be announced after talks with all partners are finished.

Varga said the government would probably close a deal to buy a 15 percent stake in Erste Bank’s Hungarian unit in the first half of June.

The government decided to acquire the stake under an agreement reached with the European Bank for Reconstruction and Development (EBRD) and lenders in February 2015.

Hungary will pay 30-40 billion forints for the stake, but Varga declined to reveal the final figure before the contract is signed.

Varga said he expected the sale of state-owned Budapest Bank to be finalised by next year, with proceeds already flowing into the 2017 budget.

“I very much hope we will sell this bank for as much as we paid for it,” Varga said.

The state bought Budapest Bank from GE Capital for 700 million US dollars last year.

Source: http://mtva.hu/hu/hungary-matters

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