August 10th, 2017

Banks “see no major problems as National Bank’s exchange rate scheme concludes

Hungarian banks told MTI they are not seeing signs of mass problems with borrower payments as an exchange rate cap scheme introduced five years ago by the National Bank of Hungary (NBH) winds up. The scheme allowed borrowers with foreign currency loans to cap their repayments based on a set exchange rate. The difference between the set rate and the market rate was placed on a separate account for repayment up to five years later. Interest costs on the separate account were covered in equal part by the banks and the state during the period.

Based on earlier comments by István Binder the spokesman for NBH the loan instalments of some 59,000 borrowers could rise by an average 7,000 forints as the scheme winds up. K&H said around 17,000 of its clients are affected representing an exposure of 107 billion forints (EUR 351.4m). CIB Bank said 8,000 of its loan contracts are involved and instalments could rise in some 45% of the cases. Raiffeisen Bank said it has 4,700 clients who were part of the exchange rate programme. Unicredit Bank said the changes should result in instalments rising by an average 6,500 forints for a little more than 2,000 of its clients. MKB Bank citing banking secrecy rules did not reveal figures for the number of clients affected while OTP said their clients represent around a 20% of all banking clients who partook in the scheme.

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  • MKB Bank citing banking secrecy rules

    So the most Fidesz-controlled bank in the world has a problem being open about their exposure…

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