Improved employment, higher real wages positive for banks – Moody’s

Budapest, May 30 (MTI) – Lower unemployment, higher employment and rising real wages should positively impact Hungary’s banking sector, ratings agency Moody’s said in an analysis on Monday.

Higher real wages is credit positive for banks because it enhances households’ ability to service their bank loans and will help reduce banks’ non-performing retail loans, Moody’s said.

The ratio of non-performing loans in the local banking sector’s retail portfolio stood at 17.3 percent of gross loan stock in March, it noted.

Higher employment will positively affect domestic demand, revive retail lending and support revenue growth, Moody’s said.

Moody’s expects the asset quality of FHB Mortgage Bank, Budapest Bank and OTP Bank to benefit the most from the improvement in real wages.

Source: http://mtva.hu/hu/hungary-matters