The Hungarian banking sector reported a record HUF 322bn in after-tax profit during the first six months of 2019, according to the National Bank. Net interest revenue continued to drive profitability, increasing by 10 percent to HUF 617bn in H1. Net revenue from commissions and fees was up 9 percent, while banks’ operating income increased 5 percent, and operating costs grew 10.6 percent y-o-y. Hungarian banks’ loan portfolio increased by more than 11 percent to HUF 27.5 trillion. Deposits reached HUF 35.2bn, and equity hit HUF 5 trillion, a 13-percent increase. Marton Nagy, deputy governor of the National Bank, called the sector’s profitability strong but questioned its sustainability. Senior executives of Hungarian banks expect lending will peak this year. László Harmati, CEO of Erste Bank, admits there is a need for consolidation, pointing out the difficulty of operating a universal bank with less than 500,000 customers.
