HungaryTrends – The previous week in business and finance
See below MTI’s main business and financial news from the previous week:
WIZZ AIR NET PROFIT CLIMBS TO EUR 246 M
Hungarian low-fare airline Wizz Air’s net profit rose by 27.5 percent year-on-year to 246 million euros in its business year ended March 31, an earnings report showed. Revenue rose by 10 percent to 1.571 billion euros. Ticket revenue increased 2 percent to 916 million euros and ancillary revenue climbed 23 percent to 656 million euros.
AUDI TO START MAKING ELECTRIC MOTORS IN HUNGARY IN TWO WEEKS
German carmaker Audi will start production of electric motors at its base in Hungary in two weeks, Audi Hungaria chairman Peter Kossler said. In future, all drivetrain technology for Audi’s first electric vehicles will come from Hungary, he added.
EU LASER RESEARCH CENTRE INAUGURATED IN HUNGARY
The ELI Attosecond laser research centre was inaugurated in Szeged (SE Hungary). Prime Minister Viktor Orban said the centre was the largest scientific investment in Hungary in modern history. The centre, part of the European Union’s Extreme Light Infrastructure (ELI) project, will make a wide range of ultrashort light sources accessible to the international scientific community. Read more HERE.
GOVERNMENT TO PAY OFF PART OF LARGE FAMILIES’ MORTGAGES
Hungary’s government has decided to pay off 1 million forints (EUR 3,252) of families’ mortgages for every third and subsequent child they have, Prime Minister Viktor Orban said at a world congress of families in Budapest. The government also decided to forgive half of the student loan debt of young women with two children and all of the student loan debt of those with three or more children, Orban said.
TAKARÉKBANK, SAVINGS COOP TO MAKE BUYOUT OFFER FOR FHB
Takarekbank, in consortium with more than 20 other members of savings cooperative integrator SZHISZ, agreed to make a buyout offer for the outstanding shares of FHB Mortgage Bank. At a general meeting in April, Takarekbank shareholders agreed to make the acquisition of 100 percent of FHB a strategic goal of the savings cooperative integration and mandated the board to move forward with a buyout. The shareholders envisioned a delisting of FHB’s shares from the Budapest Stock Exchange conditional on the outcome of the buyout.
ONE-OFFS LIFT BANKING SECTOR PROFITS IN 2016
Hungarian banks’ pre-tax return on equity reached 16.9 percent last year, returning to pre-crisis levels, but profits were lifted by one-offs, the National Bank of Hungary said in its biannual Financial Stability Report. The banking sector had combined after-tax profit of 446 billion forints. The NBH noted that freed up provisions lifted profit by 149 billion forints, while the lower bank levy left lenders with 71 billion forints more profit and the sale of stakes in Visa Europe with almost 30 billion forints. Dividends added 26 billion forints bottom line. The NBH said “no significant improvement” occurred in the drivers of banks’ core business, such as interest income and revenue from commissions and fees.
PRE-TAX PROFIT OF BANKS COULD REACH HUF 202-277 BN IN 2017
Pre-tax profit of Hungarian banks could reach 202-277 billion forints this year according to a survey of lenders by the National Bank of Hungary. The profit translates as a 6.7-9 percent return on equity. Retail lending stock is set to grow 50-150 billion forints while SME loans could rise by 100-250 billion forints.
PRAKTIKER REVENUE CLIMBS 20 PC IN 2016
Sales of do-it-yourself chain Praktiker rose by 20 percent to 39.2 billion forints last year managing director Karl-Heinz Keth said. Praktiker plans to open another two or three stores in Hungary in the long term, he added. Praktiker has 20 stores in Hungary, employing 1,400 people.
NBH LAUNCHES PHASE TWO OF MLS
The National Bank of Hungary launched the second phase of its Market-Based Lending Scheme (MLS) which offers banks incentives to boost lending after the phase-out of the Funding for Growth Scheme (FGS). In phase two of the scheme, the NBH is cutting the allocation for interest rate swaps (IRS) conditional on lending activity to 300 billion forints from 1,000 billion forints. It is reducing the allocation for a preferential deposit facility to 150 billion forints from 500 billion forints.
ZWACK BOARD PROPOSES HUF 1,050-PER-SHARE-DIVIDEND
The board of spirits maker Zwack Unicum will propose to shareholders payment of a 1,050 forint-per-share dividend on earnings from the business year ended March 31 at an annual general meeting scheduled for June 29, the AGM agenda showed. The dividend fund comes to 2.1 billion forints. Zwack’s after-tax profit for the period came to 2.4 billion forints. A year earlier, shareholders approved an 850 forints-per-share dividend.