Hungarian banking sector ‘highly resilient’ amid challenges

The National Bank of Hungary (NBH) said the local banking sector’s “significant” capital position and liquidity reserves would remain “robust” even in the case of a crisis more severe than the current forecasts, in a report published on Thursday.

“The Hungarian banking sector is highly resilient and had significant capital and liquidity buffers when it entered the complex, challenging period. Although banks’ liquidity buffers fell slightly, ample reserves are still available. The sector would meet the regulatory requirements even in the case of a severe liquidity shock,” the central bank and financial market regulator said in its biannual report on financial stability.

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Presenting the report, NBH department head Bálint Dancsik noted that the sector’s liquidity coverage ratio stands at 164 percent of the regulatory minimum, while its net stable funding ratio is at 128 percent of the required threshold. Operative liquidity reserves of the local banking sector reach 15,200 billion forints (EUR 37.4bn), he added.