New governor wants more effective Hungarian National Bank, dismisses hundreds of employees – UPDATED
The National Bank of Hungary (NBH) on Thursday announced a 15pc headcount reduction as well as changes to its rules of organisation and operation.
The rules of organisation and operation have been “adjusted to new goals and challenges”, in line with an initiative of the new management to focus on core activities and scale back ones that fall outside of the scope of the national bank’s legal mandate, the NBH said. The changes will result in “significant savings” and greater efficiency, it added.
The new management is committed to the national bank’s “efficient and transparent” operation, the NBH said.
Mihály Varga, the new governor of the national bank answered press questions on a conference concerning the mass dismissals. Varga said they had begun a review concerning the staff and the process would last at least until August. He confirmed that he stopped hiring new staff and the goal of that measure was to save money.
About 260 National Bank workers affected
“New tasks and new areas have opened up, while previous ones will be closed and narrowed down. Accordingly, the national bank does not need the current number of staff,” the governor explained in response to a question, adding that layoffs will affect every department as part of a group downsizing. According to him, they have discussed the conditions and details of this with the workers’ council.
Currently, the national bank has roughly 1,700 employees, of which 15% means about 260 affected workers, Portfolio wrote. The governor also spoke about the change in the national bank’s supervisory board, explaining that it happened because one of the board members resigned.
According to him, the internal audit related to the operation of the foundations has not yet been completed.
National bank initiates talks with banks on boosting corporate lending
The National Bank of Hungary (NBH) is initiating talks with banks with the aim of boosting corporate lending and reducing fees, central bank governor Mihaly Varga told a conference organised by business news source Portfolio in Budapest on Thursday.
Varga said that corporate clients’ banking costs had climbed faster than retail clients’ over the past five years. He noted an agreement reached in April on keeping retail banking fees down and said the aim was to reach an agreement on corporate banking fees in June.
While retail lending is picking up, corporate lending has weakened for the past two years, he said.
In spite of the uncertain international environment, the resilience of Hungary’s banking system is high and it is able to support an expansion in lending, he added. Local banks’ capacity to lend is at a “historical peak”, he added.
Varga said the central bank and the government needed to focus on giving impetus to corporate lending, which was in the doldrums even as retail lending picked up.
Addressing the state of the economy, Varga pointed to improving balance indicators. While GDP growth remains modest, rising consumption and high employment are reinforcing positive expectations, he said.
The central bank continues to focus on the fight against inflation, he added.
UPDATE: National bank gov addresses German-Hungarian business chamber
Governor Varga spoke at the annual general meeting of the German-Hungarian Chamber of Industry and Commerce (DUIHK) on Thursday.
German-owned companies have played a big role in the Hungarian economy for decades, Varga said, adding that it was of key importance for the German economy to rebound amid market volatility resulting from the trade war. He added that the American tariff war had impacted the Hungarian economy, too, especially through the automotive industry, causing weaker investor confidence and souring sentiment on international markets.
He noted that over 24pc of Hungary’s exports went to Germany in 2024 and said it was in the country’s fundamental interest for the German economy to return to the growth path. Varga said the central bank’s new management was committed to keeping inflation persistently low and ensuring a stable financial system.
HERE are some more articles concerning the Hungarian National Bank.
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