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Hungarian banks' pretax profits jump 11.8 pct in first half of 2017
August 25, 2017 / 8:46 AM / in 2 months

Hungarian banks' pretax profits jump 11.8 pct in first half of 2017

BUDAPEST, Aug 25 (Reuters) - Pretax profits at Hungarian banks surged 11.8 percent to 393.4 billion forints ($1.5 billion) in the first six months of 2017 compared with the year before, the central bank said on Friday.

Lenders reported a 1 percent rise in net interest income to 391.4 billion forints, the central bank said, despite a fall in interest rates to record lows. Commission income jumped 7 percent to 256.1 billion forints.

After several lean years under Prime Minister Viktor Orban’s right-wing populist government, which levied a big windfall tax on banks in 2010, lenders returned to profitability in 2015 and the sector improved again in 2016 when the bank tax was reduced.

Strong growth in the economy and a pickup in lending have boosted the bank sector further this year.

Operating costs increased to 441.2 billion forints from 420.2 billion in the first half of 2016.

Major players in the sector include homegrown OTP Bank , Belgium’s KBC, Austria’s Erste Bank and Raiffeisen, and the local units of Italy’s UniCredit and Intesa SanPaolo.

The sector reported an average capital adequacy ratio of 21.4 percent at the end of June, up from 21.1 percent at the end of 2016, the central bank added.

$1 = 258.3600 forints Reporting by Krisztina Than; Editing by David Holmes

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