Page 11 - BNE_magazine_10_2019 kolomoisky

bne October 2019 Companies & Markets I 11
Bank chiefs see further growth in lending
Senior executives of Hungarian banks discussed the bank sector's outlooks at the annual conference of economists. Bank chiefs expect lending to peak this year, helped by state subsidised loans.
Deputy governor of the MNB Marton Nagy called the profitability of the banking systems in the region strong, but questioned their sustainability.
Hungarian banks reported a combined €2bn profit and Polish banks €3.5bn, he said. OTP sees further room for growth in retail lending as the level of economic development would justify double the current level of borrowing in this segment, OTP Bank deputy-CEO Laszlo Bencsik noted.
Erste Bank deputy CEO László Harmati stressed the need for consolidation, saying it is not sustainable to operate
“This year will be a peak for lending, even without the subsidised loan”
a universal bank with less than 500,000 clients. Strong demand for the new baby loan could boost lending by HUF300bn at sectoral level in H2.
"This year will be a peak for lending, even without the subsidised loan, but certainly including it," he added.
The current 10-12% return on equity should be stabilised
in the bank sector, which is also a benchmark of MNB, opined Jozsef Vida, CEO of Magyar Takarekszevetkezeti Bank.
Money continues to flow out
of Hungarian investment funds
Levente Szilagyi in Budapest
Redemptions of investment fund units remained high in August as retail investors preferred the new super bond, monthly data released by the Association of Hungarian Investment Fund and Asset Management Companies (BAMOSZ) on September 17 show. In the June-August period, HUF264bn (€792mn) were divested from investment funds.
Net redemptions came to HUF40bn in August, down from HUF45bn in the previous month and well over the HUF16bn average in the 12 months to August, excluding June.
Net redemptions reached a ten-year high of HUF179bn in June when the new retail government bond was launched.
The Plus bonds, which pay an annualised yield of 4.95% if held for the full five-year maturity, have attracted record demand. Half of the money flowing to the new retail bond came from households redeeming investments, including short-maturity bonds, the stock of which fell by some HUF600bn in the June- August period. Subscription of the new bond reduced cash and deposits by around 10%, or by some HUF400bn in total.
The fresh BAMOSZ data show assets of investment funds managed by association members slipped 2% y/y to HUF6,170bn in August.
Real estate funds remained the top choice for investors with net asset value of HUF1.54 trillion, up 15% y/y.
Assets in bond funds were up 34% at HUF1.3 trillion, while mixed funds had HUF1.1 trillion in assets, up 5% y/y. Assets in funds of funds edged down 4% to HUF1.28 trillion.
Assets in money market funds plunged 88% to HUF75bn after a restructuring prompted by the application of stricter operating conditions under a European Union directive.
Assets in absolute yield funds declined 18% to HUF844bn, while assets in shares funds were up 5% at HUF416bn.
www.bne.eu