Hungarian banks' Q1 pre-tax profit more than doubles: central bank

MBH Jelzalogbank Nyrt

25/05/2016 11:20

BUDAPEST, May 25 (Reuters) - Hungarian banks' pre-tax profit 
more than doubled in the first quarter from a year earlier to 
198.5 billion forints ($703 million), the central bank said on 
Wednesday. 
    It said provisioning levels fell from the same period a year 
ago when local lenders, about half of which are foreign-owned, 
booked the costs of a court ruling forcing them to repay some 
past cost hikes for retail borrowers. 
    While those one-off costs distorted last year's figures, 
banks' overall business also improved, with lenders reporting an 
11.2 percent rise in first-quarter net interest income to 213.8 
billion forints, despite a fall in central bank interest rates 
 NBHI  to record lows.  
    Operating costs were little changed. 
    A Reuters survey showed last month that the sector, saddled 
with one of Europe's highest bank levies under Prime Minister 
Viktor Orban, was headed for a turnaround after a cut in taxes, 
an improvement in the economy and stronger demand for credit. 
 urn:newsml:reuters.com:*:nL5N1792JD 
    In the first quarter, however, banks' total stock of loans 
still declined as retail loans fell by 6.8 percent from a year 
earlier, while corporate loans dropped by 5.9 percent. 
    But corporate lending, underpinned by the central bank's 
monetary stimulus measures, rose by 1.1 percent from the fourth 
quarter and the decline in retail loans slowed to 1.5 percent 
from the previous quarter, the central bank said. 
    It said the rate of non-performing retail loans dropped to 
17.3 percent in the first quarter, while in the corporate 
sector, the rate of loans more than 90 days overdue fell to 9.1 
percent. 
    The sector reported an average capital adequacy ratio of 
20.2 percent in the first tree months, the central bank said. 
    Key players include home-grown OTP Bank  OTPB.BU , Belgian 
KBC  KBC.BR , Austrian Erste Bank  ERST.VI  and Raiffeisen 
 RBIV.VI  and the local units of Italian UniCredit  CRDI.MI  and 
Intesa SanPaolo  ISP.MI . 
($1 = 282.19 forints) 
 
 (Reporting by Gergely Szakacs; Editing by Ruth Pitchford) 
 ((gergely.szakacs@tr.com; +36 1 327 4748; Reuters Messaging: 
gergely.szakacs.thomsonreuters.com@reuters.net)) 
 
Keywords: HUNGARY BANKS/CENTRALBANK