Foreign Currency Loans – Good Finance Bank. Losses Between EUR 120-160 million

2 Nov

Good Finance Bank Zrt.’s loss could be between EUR 120-160 million (HUF 36.87-49.16 billion) due to the Act on the Settlement of Certain Issues in the Consolidation Resolution on Consumer Loan Contracts, Good Finance Bank said in an email to MTI on Wednesday. They added that the bank is taking action on possible litigation that may result from unilateral contract changes.

Several banks have announced that they are examining all available law


In recent days, several banks have announced that they are examining all available law enforcement options to prove that their consumer loan agreement procedures have always been fair and compliant with applicable law.
In response to questions from the central bank’s press conference on Tuesday, Ádám Balog, vice president of the National Bank of Hungary, said that the central bank’s position that the first law on the FX loan package could burden the Hungarian banking system by around 700-900 billion forints.

On July 8, 2014, the E-bank Group announced that its Q2 2014 results will be impacted by increased provisioning for the Hungarian retail loan portfolio. For the second quarter, Goodbank Bank will make a one-time net provision of HUF 49 billion as a result of the CURRU’s use of the exchange rate margin for retail bank loan agreements and the unilateral contract amendment law.
The capital position of Goodbank Bank will continue to be adequate even after the said provisioning and will meet the level of capital required by the supervision. In terms of loan-to-deposit ratio, liquidity is also among the best in Hungary, the credit institution said.

It will continue to comply with applicable legislation in the past

It will continue to comply with applicable legislation in the past

Bank told MTI on Wednesday that, as there are still a number of open regulatory issues and further legislative measures are pending, their impact cannot yet be accurately estimated.

In accordance with Hungarian accounting rules, Budapest Bank made a provision of HUF 34.3 billion in Q2, which includes the burden of settling the exchange rate margin and unilateral contract adjustments.
The Bank maintains that at all times it has acted in accordance with applicable laws and regulations. The bank has not yet taken any legal action.

E-Money Bank expects negative impact of up to € 300 million ($ 92.8 billion) on a bill to resolve certain issues related to the Consumer Credit Unity Resolution Act, MTI said Tuesday.
E-Money Bank also emphasized that its loan agreements were always in compliance with applicable legislation and indicated that it would use the legal possibilities provided by Hungarian law accordingly.

Due to the non-utilization of the exchange rate margin

Due to the non-utilization of the exchange rate margin

Mortgage Bank Ltd. is expected to reimburse its clients about HUF 8.1 billion, with a negative impact on pre-tax profit of HUF 6.7 billion and HUF 68.6 billion due to unilateral contract changes. but the bank wants to exercise its right to sue, the mortgage bank announced on the Budapest Stock Exchange (BSE) website on Monday.

The E-cash Group as a whole is expected to pay back HUF 27 billion. Taking into account the risk cost incurred for this purpose in 2013, the negative profit before tax could amount to approximately HUF 25 billion, which will be accounted for in Q2 2014. According to the bank in early July, lawsuits involving a unilateral contract modification clause could affect close to HUF 90 billion in foreign currency loans and an additional HUF 20-30 billion in forint mortgages and consumer loans.

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