BUDAPEST Feb 22 Hungary's banks produced
shrinking but still massive losses in 2012 as a special tax on
the financial sector continued to weigh on results, while
interest and investment income fell, a watchdog said.
The emerging European country's banks have paid the highest
bank tax in the European Union and suffered from various other
punitive measures since the conservative government of Prime
Minister Viktor Orban took power in 2010.
The banks, whose cumulative profits topped 300 billion
forints ($1.36 billion) before the 2008 financial crisis, also
suffered as the country struggled to exit recession.
Commercial banks produced a total of 160.6 billion forints
in losses last year, compared with a total loss of 243.3 billion
in 2011, the PSZAF said in a report on Friday. Nearly all of the
losses in 2012 came in the fourth quarter.
Loan losses and risk provisioning fell sharply, to a total
of 142 billion forints in 2012 from 682 billion in 2011. That
did not translate to a steeper improvement in the bottom line
because interest and non-interest income both fell sharply.
The PSZAF also noted that the banking sector was polarised
in terms of net profit. Three banks produced 88 percent of all
the losses among loss-making banks, while the most profitable
banks were responsible for more than two-thirds of all profits.
Individual banking results were not included in the report.
The country's largest bank, OTP reports 2012 results
on March 8.
($1 = 220.7034 Hungarian forints)
(Reporting by Marton Dunai; Editing by Helen Massy-Beresford)