BUDAPEST, July 21 Hungary's MKB has built
provisions worth 5.1 billion forints ($22.28 million) for the
first half of 2014 to cover refunds to clients due to new
legislation that requires banks to compensate borrowers for
exchange rate spreads applied on foreign currency loans, the
bank said on Monday.
MKB, a unit of Bayerische Landesbank, also said
in a statement that it was planning to use the option of legal
remedy related to another part of the legislation which covers
unilateral contract changes.
The law was drafted by Prime Minister Viktor Orban's
government as part of efforts to cut borrowers' repayments,
mostly on foreign currency loans but also in forint debt.
($1 = 228.8700 Hungarian Forints)
(Reporting by Krisztina Than and Sandor Peto)