NYIREGYHAZA, Hungary, Sept 5 Hungary's "bad bank" will open a six-month window probably from October for the country's banks to offload their toxic commercial property loans and foreclosed real estate, the central bank's vice governor said on Friday.
The National Bank of Hungary said in July the bad bank would be set up by September or October and would be more of an asset manager, as it would not be linked to any bailout but would aim to clean banks' balance sheets.
Vice Governor Adam Balog told a conference of economists in eastern Hungary that the asset manager would buy project loans of above 500 million forints ($2.1 million) and foreclosed real estate above the value of 200 million forints from banks.
He said the asset manager would probably exist for 10 years, but did not say how it would be funded.
He also said it would buy banks' assets "at market price" but did not specify.
Balog said non-performing loans were draining banks' liquidity and were hampering lending, and the asset manager would help resolve this problem.
After a court decision, Hungary's banks now face a blow from new government measures to help borrowers that could cost the sector 900 billion forints this year in refunds to clients for past interest rate and fee increases.
A planned conversion of a pile of household foreign currency loans into forints could impose further losses on the banks, which have already been paying one of Europe's highest sector taxes since 2010.
Banks operating in Hungary include Austria's Erste and Raiffeisen, Italy's Intesa and UniCredit , as well as Hungarian lender OTP.
(1 US dollar = 242.0100 Hungarian forint) (Reporting by Krisztina Than; Editing by Mark Potter)