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Banks to draft lending recovery plan

The Hungarian Banking Association has agreed to draft a package of measures banks can take to support the recovery of the lending market at a meeting with Economic Development Minister Marton Nagy on Monday.

“The economic development minister established that the banking sector is generating windfall profits, which would justify the introduction of a bigger windfall profit tax or a new bank levy. However, at present, the economy needs this money more than the budget, so the government expects banks to make greater efforts in the interest of supporting the lending recovery,” his ministry said on Tuesday.

Lenders should “actively participate” in state-subsidised credit programmes such as the Szechenyi Card Program and the Baross Gabor Reindustrialisation Credit Programme for businesses, or home purchase programmes for retail borrowers.

The sides agreed at the meeting that financial system players, “especially banks”, are operating in a stable manner, while their liquidity, capital and operating profitability “shows a favourable picture”.

From this “advantageous position”, Nagy said, lenders are expected to “cooperate fully” in preventing the credit market from freezing up and supporting “healthy lending”. While the aim in 2023 was to bring inflation under 10 percent, economic growth needs to recover in 2024, he added.

The association will present the lending recovery plan to the government “within a week, if possible”, the ministry said.

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