In accordance with the Memorandum of Understanding concluded with the EBRD, the amendment proposing the lowering of bank tax in Hungary is scheduled to be submitted to Parliament next week, as the Cabinet has reached a common stance, Minister of State for Taxation and Financial Affairs Gábor Orbán said at a conference organized by Portfolio.hu in Budapest.

As the Minister of State underlined, the amendment “contains not more and not less than what had been agreed upon with the EBRD.”

The issues concerning investment service providers will also be addressed without breaching the terms laid down in the MoU, he stressed.

Talking about private bankruptcy, Gábor Orbán said that -- following negotiations with the National Bank of Hungary -- he is very optimistic regarding several issues, and a compromise may have been reached.

Hungarian economic growth is seen to reach a point some time at the end of this year or the beginning of next year when it will be necessary to accelerate lending, he added.

Orbán Gábor pointed out that Hungary needs banks that operate efficiently, in a transparent and prudent manner and which can underpin growth through lending and remain prosperous.

As the Minister of State explained, the domestic banking sector has been too fragmented and the eight or nine large international banks operating in Hungary cannot work with the proper level of efficiency that might ensure fair practices and sufficient profitability.  The state acquisition of bank ownership rights has been necessitated by the effort to create a more efficient banking sector, he emphasised. On the other hand, the Government does not intend to keep these banks as state properties in the long term.

The forint conversion of forex loans and refunds to forex borrowers caused direct losses of HUF 600-700bn for the banks, but on the other hand, the banks’ balance sheets have been significantly cleansed and that in turn is expected to prompt a renewed, large wave of lending.

As Gábor Orbán said, the general secretary of the OECD has praised the Government for the timing and method of the forint conversion of forex loans.

(Ministry for National Economy)