Jelasity Radován: MÁP + investors earned more in the first half of the year than bank owners

Jelasity Radován, President of the Hungarian Banking Association, spoke about the following:

• The profitability of the Hungarian banking sector has fallen dramatically during the epidemic, and that is not the end. The delinquency rate (delinquency rate) fell further in the first half of the year, but the sector has already made important provisions that do not yet know exactly which loans will apply.
• If we take into account only the national banking sector (for example, without subsidiaries of OTP – ed.), The profit of the sector in the first half of the year was 46 billion HUF, which means a drop of 80%, while that operating income increased by almost 10%. The return on equity was only 1%, which means that whoever invested their money in MÁP + could earn more than the average bank owner.
• When the repayment moratorium was introduced, Hungarian banks suspended the maturity of HUF 16 billion in loans in 24 hours, representing a third of Hungarian GDP. 95% of the national office network continued to operate without interruptions.
• The instant payment system has started a new world: 93.5% of transfers are made in 2 seconds.
• The banking sector accepted and considered reasonable the contribution of 55,000 million HUF to the epidemiological fund.
• If something were resistant to the coronavirus, the waiting baby loan could be called that.
• The moratorium on loan repayments in Hungary is by far the most favorable for clients in the region. It provides automatic participation, has a duration of 9 months (in another case, 3 or 6 months and can be extended), has a maturity extension, does not allow an increase in the fee and does not capitalize unpaid interest.
• The moratorium was justified in March, with 66% of the population and 79% of the corporate segment using it in June, with a large variation depending on the bank. The loss of interest from the banking sector is a loss of approximately HUF 50 billion.
• The lesson of recent months is that the shutdown of the economy should be avoided at all costs.
• The government, the MNB, and even the coronavirus epidemic have significantly supported digitization efforts in the banking sector, such as enabling the electronic conclusion of mortgage loan deals.
• The banking sector still has its own problem: the high tax burden. We hope that if the coronavirus ends at the same time, we will come back “to reduce this.

Cover image: Ákos Stiller / Portfolio