December 29, 2016 / 3:14 PM / a year ago

Hungarian banks on track for profitable 2017

BUDAPEST (Reuters) - Hungarian banks are on track for another profitable year in 2017, the head of the local Banking Association told Reuters, adding that six lenders were preparing to sell large chunks of distressed mortgages to clean up their books.

Chairman of the Hungarian Banking Association Mihaly Patai gestures during a news conference in Budapest, May 30, 2011. REUTERS/Bernadett Szabo

“I am not saying we are set for seven years of prosperity, but this year we have embarked on a course of normalcy and this will continue next year,” Hungarian Banking Association Chairman Mihaly Patai said on Thursday.

    Patai, who is also the head of UniCredit’s (CRDI.MI) local subsidiary, Hungary’s second-biggest lender by assets, said the sector could post an average return on equity (ROE) of 6-7 percent next year, down from an expected 9-10 percent in 2016.

    Profits would be lower because one-off factors, such as the large-scale release of provisions linked to problematic foreign currency loans, would not be repeated next year, Patai said in an interview in his office in central Budapest.

    Reporting by Gergely Szakacs and Marton Dunai; editing by David Clarke

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