August 21, 2014 / 9:11 AM / 3 years ago

Hungary to assess fairness of car loans -minister

BUDAPEST, Aug 21 (Reuters) - Hungary’s government will assess whether to include car loans in a broad relief package for borrowers to be launched in the coming months, Economy Minister Mihaly Varga said on Thursday.

Hungary’s banks are bracing for the impact of a scheme drafted by Prime Minister Viktor Orban’s government which the central bank estimates could cost lenders up to 900 billion forints ($3.8 billion).

The programme is intended to make banks to compensate clients for past overcharging. Banks have launched legal challenges against the legislation to prove that unilateral contract changes implemented in the past years were fair.

The central bank said in an emailed response that its cost estimate for the relief package included all contracts potentially involved, including car loan deals.

“It is possible to examine whether this type of unfair practice emerged not just in mortgage loans but in car loans as well,” Varga told public radio in an interview.

“We will do so and will make a proposal for the settlement of the loans in the autumn accordingly,” he said.

Hungarian banks held a total stock of car loans worth 274 billion forints as of March, according to the latest available central bank data, of which 181 billion forints were foreign currency-denominated.

Banks in Hungary include units of Belgium’s KBC, Austria’s Raiffeisen Bank and Erste Bank, Italy’s UniCredit and Intesa Sanpaolo, and MKB Bank.

1 US dollar = 236.81 Hungarian forint Reporting by Gergely Szakacs; Editing by Toby Chopra

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