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Hungary's MKB builds provisions to cover client refunds
July 21, 2014 / 11:52 AM / in 3 years

Hungary's MKB builds provisions to cover client refunds

BUDAPEST, July 21 (Reuters) - 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)

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