Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Hungary eases repayment rules for some loans under moratorium

Published 09/16/2021, 05:57 AM
Updated 09/16/2021, 06:01 AM

BUDAPEST (Reuters) - Hungary's government has eased repayment rules for retail credit card loans and overdraft credit as part of an extended debt moratorium, the latest in a string of gifts for households ahead of next year's election.

Prime Minister Viktor Orban's government decided on Monday to extend the moratorium, in place since March 2020, for some vulnerable groups until mid-2022.

The scheme will be extended for pensioners, families with or expecting children, public works scheme employees, and borrowers whose income has declined from last year.

Facing the prospect of a tight election, Orban has showered the electorate with handouts, including a planned $2 billion income tax rebate for families, scrapping income tax for young workers, home renovation grants and extra pension payments.

Under the terms of a government decree published late on Wednesday, Hungary's banks will have to recalculate retail credit card loans and overdraft credit to apply lower interest rates stipulated as part of the moratorium.

Financial news website portfolio.hu said the measure could affect over 500,000 borrowers, costing banks between 20 billion to 30 billion forints ($68 million to $102 million) as the loans are recalculated with a maximum interest rate of about 12% applied to consumer loans.

Lenders will have 60 days to make good on any repayments owed to borrowers. The local banking sector earned a net profit of 405 billion forints ($1.37 billion) in the first half.

A spokeswoman for the Hungarian Banking Association declined immediate comment. Press officials at OTP Bank, Hungary's top lender, did not immediately respond to emailed questions for comment.

At 0828 GMT, OTP shares traded 0.3% higher at 18,350 forints, broadly in line with the blue chip index. OTP shares have gained 34% over the past six months, outperforming the wider market, which rose by 18% over the same period.

($1 = 295.47 forints)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.