BUDAPEST, Feb 22 (Reuters) - 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)