Rating upgrades and record profitability in Hungary has kindled optimism for 2018. Danielle Myles reports.
There have been encouraging signs for Hungary’s banking sector in recent months. Last November its central bank announced that the sector’s profit from January to September 2017 was higher than any first three quarters since the financial crisis.
This followed Moody’s affirmation of its positive outlook for the banking system, based on its expectation that the country's improving economy will bolster loan quality and lead to a fall in non-performing loans. Some of Hungary’s leading lenders have seen improvements on a standalone basis, too.
In October Moody’s upgraded a number of OTP Bank’s ratings, which has $3.6bn in Tier 1 making it four times bigger than its nearest rival, UniCredit. The Italian bank’s local subsidiary has $865m of Tier 1 capital.
It is followed by Austrian Erste Bank’s Hungarian unit, which recently had its outlook upgraded to positive by Fitch. Intesa Sanpaolo’s local subsidiary, known as CIB Bank, ranks fourth with $698m in Tier 1. It reportedly expects to double its personal lending volumes in 2018.
K&H, which is owned by Belgium’s KBC, rounds out the top five with $669m in Tier 1 capital. Fitch also upgraded its outlook to positive last November.
All data sourced from www.thebankerdatabase.com
