Fitch: recovery of Hungarian banks underway

London (MTI) – The operating environment for banks in Hungary has improved, due to positive developments in the economy and the government’s intention to facilitate a gradual normalisation of the banking business environment, Fitch Ratings said on Friday.

The ratings agency said in a peer review of Hungarian banks that the government’s commitment is reflected in the memorandum signed with the EBRD in February in which the government pledged to refrain from implementing new onerous banking legislation and to reduce the bank levy in 2016 and then further in 2017.

The Hungarian banking system is likely to be profitable in 2015 after an all-time high loss in 2014. However, prospects for the sector remain weak due to muted appetite for new credit in the economy, substantial legacy problem loans and thin margins in light of low interest rates, Fitch Ratings said.