Banking Association Chief: Hungary Well Positioned To Weather Crisis

  • 27 May 2020 12:13 PM
  • Hungary Matters
Banking Association Chief: Hungary Well Positioned To Weather Crisis
Hungary can avoid a crisis similar to the one in 2008 thanks to measures taken by the government and the National Bank of Hungary (NBH), as well as the country’s stable banking sector, Radovan Jelasity, the recently elected chairman of the Hungarian Banking Association, said in an interview with MTI.

“Macroeconomic fundamentals are stable, the general government deficit is modest, the banking sector is stable and economic growth was robust until early in March, which gives cause for confidence,” Jelasity, who also heads the local business of Austria’s Erste Group, told MTI.

He said the banking sector entered the current crisis in an “entirely different state” than it did the 2008 global financial crisis.

In 2008, when the sector’s loan-to-deposit ratio stood at 152%, making lenders reliant on foreign refinancing, he said. The same ratio reached 75% in 2019, allowing banks to finance lending from deposits or buy government securities, he said.

Retail lending stock is now entirely denominated in forints – unlike in 2008, when Swiss franc-denominated loans were the most popular retail lending product – and NPL ratios are lower, Jelasity said. Banks have ploughed back earnings into their businesses, making them capital strong, he added.

He noted that the banking sector had given its “full support” for government measures responding to the crisis, even for a moratorium on repayments of retail and corporate loans which will generate a loss of about 30 billion forints (EUR 84.5m) for lenders.

MTI Photo: Zsolt Czeglédi

  • How does this content make you feel?

XpatLoop Media Partner

Hungary Matters

Launched in January 2014, this newsletter published on week days covers 'everything you need to know about what’s going on in Hungary and beyond', according to its publisher the state media agency MTI.

Explore More Reports

  • Socialists Call For Making Minimum Wage Tax-Exempt

    Socialists Call For Making Minimum Wage Tax-Exempt

    • 12 Apr 2021 1:04 PM

    The Socialist Party will be campaigning in the upcoming opposition primary in favour of making the minimum wage tax-exempt and reducing the income tax for low earners, the party’s co-leader said over the weekend.

  • Hungary Gets Euro 304 Million More Covid Aid From EU

    Hungary Gets Euro 304 Million More Covid Aid From EU

    • 3 Feb 2021 8:53 AM

    The European Commission on Tuesday said it has disbursed another 304 million euros in financial support to Hungary within the framework of its SURE unemployment scheme to help the country weather the coronavirus crisis.

  • Hungary Perceived As Most Corrupt In EU

    Hungary Perceived As Most Corrupt In EU

    • 2 Feb 2021 10:51 AM

    Bulgaria, Hungary, and Romania jointly ranked the lowest among European Union member states in Transparency International's "2020 Corruption Perception Index" global survey, published last week.