4 big foreign-owned banks may leave Hungary earlier

Four of the eight large foreign-owned banks in Hungary may leave the country within the next 18 months, earlier than expected, the country's central bank governor said Friday. There had been reports that the four banks would withdraw in three to four years, but now it seems that they may leave in 6 to 18 months, Gyorgy Matolcsy told news channel HirTV during an interview. He criticized these banks, saying they don't offer credit and don't help the Hungarian economy. To remedy the banks' departure, the role of domestic small and medium-sized banks may be strengthened, and new domestic banks may also be created to take over the portfolios left by those withdrawing banks, the central bank governor said. Matolcsy said foreign-owned banks have a 58-percent share of Hungary's banking system, which is very high. Currently, the eight large foreign-owned banks are holding 70 percent of all loans in the country. Matolcsy did not exclude the possibility that Asian banks will come to Hungary to replace the withdrawing banks within the framework of the government's "Opening to the East" policy.