Hungary’s state-owned Budapest Bank (BB) group had consolidated net profit of HUF 14.7bn in 2015 according to Hungarian Accounting Standards, the bank said. The bank reported losses for the first time after twenty years of operation in 2014, when net losses came to HUF 38.7bn. Budapest Bank was acquired by the state of Hungary in June last year when Corvinus Nemzetkozi Befektetesi, a unit of the state-owned Magyar Fejlesztesi Bank group paid USD 700m for 100pc of the bank’s shares to the General Electric Capital Group. In addition to growth achieved in the key business segments, the bank attributed the positive results to improving risk provisions and one-off items that contributed to profits. Due to falling volumes resulting from the settlement of foreign currency mortgages and car loans with consumers, the bank group released a substantial amount of impairment in the first half of the year, which improved the bank’s profits by HUF 4.7bn. The reduced portfolio resulting from the settlement, the lower base rate and the new, stricter pricing and credit assessment regulation had a negative impact on profit-generating capacity but this was offset by one-off items such as revenue from asset sales, the bank said.

Budapest Bank chairman-CEO Gyorgy Zolnai said total assets rose by 7.8pc to HUF 965bn in 2015. Gross retail credit portfolio however fell by 14pc, mainly because of FX debt settlements, to HUF 324.4bn. Operating costs were 0.6pc lower for the year at HUF 38.4bn. Budapest Bank’s NPL ratio was still at 28pc last year, a slight improvement compared to 2014, but well over the 18pc industry average, said Mr Zolnai. The chairman-CEO noted that the bank had already repaid all of its loans owed to its previous owner GE and with the conversion of FX car loans its has almost entirely eliminated FX risk exposure.

Budapest Bank is planning to achieve around HUF 10bn of profit in 2016.