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Nov 17, 2016

Hungary's central bank receives 300 billion HUF debt from local banks

The central bank said problems in the corporate loan portfolio of banks was still caused by project loans, for which the default rate was 34 percent at the end of June, versus a 10 percent default rate for other corporate loans

The National Bank of Hungary's asset manager MARK Zrt has received more than 300 billion HUF worth of distressed assets from local banks, the central bank said in its latest financial stability report.

Reuters reveals that the central bank said problems in the corporate loan portfolio of banks was still caused by project loans, for which the default rate was 34 percent at the end of June, versus a 10 percent default rate for other corporate loans.

"The continued cleaning of project loans can be supported in parallel with the pick-up in the market by MARK Zrt, in which 23 financial institutions have already registered with more than HUF 300 billion volume," the bank said.

It also said that the vulnerability of the Hungarian banking sector was low while its shock absorbing capacity was solid and has strengthened further this year.

"In the near future, the NBH will devote special attention to examining what measures may be suitable for stimulating competition in the banking sector," it added.