The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

Hungary tells banks: shape up or ship out

Foreign banks are finding it hard to make their operations in Hungary pay. They say they are still committed to the country. So what will they make of the finance minister’s public call for consolidation?

Recent years have not been kind to Hungary’s embattled foreign banks, and the pain isn’t over yet. Since premier Viktor Orban swept to power in 2010, lenders have been hit by a brace of new taxes – one directly targeting profits, the other carving a slice out of every financial transaction – as well as a relief scheme for mortgage borrowers.

Caught in the state’s crosshairs, some foreign banks have understandably opted to siphon capital out of the country and sequester it in more industry-friendly jurisdictions.

That has further infuriated a populist government. Desperate to encourage banks to lend more, to foster growth and boost spending, it is now pressing foreign banks to answer a simple question: Are you in or out?

Gabor Orban, Hungary finance minister
Some consolidation needs to take place. A system of seven or eight large banks, each with 6% to 8% market share, is unsustainable

Gábor Orban, financial policy minister

“We would prefer [foreign lenders] to leave rather than to stay and be zombie banks,” financial policy minister Gábor Orban told Euromoney in December in Budapest.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree