Hungary is open to talks about the 2011 or 2012 bank tax, however the 2010 tax is not subject to discussion - not even with international lenders, Prime Minister Viktor Orbán said after meeting OTP Bank President and CEO Sándor Csányi. On the whole, the new tax proposal package is going to have a positive impact on government revenues, he said according to a Reuters report.

OTP Bank chief Sándor Csányi also briefed the press after his meeting with the Prime Minister. He said OTP has not happy with the banking tax proposal which OTP considers unfair. On the other hand, the group’s strong profitability will facilitate tax payment without significant problems, he added. For banks to pass the tax burden on to clients is out of the question, Csányi claimed.

Erste Group Chairman and CEO Andreas Treichl expressed the same view yesterday in an interview with wire service MTI. It would be impossible to pass on costs to customers as banks’ prosperity depends on the improving financial situation of clients, he argued, adding that if the proposal is realized in its current format the tax burden is likely to be borne for the most part by the banks themselves, Treichl said.

Federico Ghizzoni, who heads UniCredit’s CEE banking operations, expressed a different opinion a month ago. Contrary to Csányi’s and Treichl’s view, he said it was inevitable for banking clients to face added costs if the bank tax was going to be approved. While UniCredit will try to cover as much of the bank tax as possible through improved efficiency, the general profitability of the banking sector is bound to decrease and this will force banks to pass on some of the costs, Ghizzoni argued.

The government is going to adopt legislative measures to make sure banks are not able to pass on the increased costs to clients, the Prime Minister’s Spokesperson Péter Szijjártó said."

Source: Portfolio Online Financial Journal