The Hungarian Banking Association held its Annual General Meeting earlier today. At the meeting, Finance Minister Mihály Varga informed participants about the outlook for the Hungarian economy, while Csaba Kandrács, Deputy Governor of the National Bank of Hungary (MNB), briefed attendants about the future vision for the Hungarian economy. The Members of the Hungarian Banking Association agreed to publish the following statement.
Looking back over the past year, in our efforts to defend ourselves against the Covid-19 pandemic, lockdown was replaced by living together subject to the observation of certain health protection rules. This has been facilitated primarily by high vaccination rates and virus variants causing milder symptoms.
The Covid-19 pandemic has resulted in a surge in digitalisation across all levels of society, as well as changes in consumption patterns and service requirements. Initially, demand and supply shocks, followed by rapid changes in needs, created disruptions in supply chains that have held back economic growth globally. In order to mitigate the negative economic effects, governments and central banks introduced stimulus programmes, and commercial banks increased their market activity. Through these measures, it was possible to avert a global economic downturn; however, inflationary pressures have emerged worldwide.
The Hungarian Government and the Central Bank also implemented innovative measures to support economic growth, extending the family support scheme, strengthening lending to small and medium-sized enterprises and corporate bond issuance, and the launch of the Green Home Programme for households under the National Credit Programme. The banking sector has successfully channelled these to customers. Due to the sharp rise in inflation in the autumn of 2021, the Government has imposed an interest rate freeze on variable-rate retail mortgages as part of its price measures. While these non-market instruments protect consumers from the impact of inflation in the short term, maintaining them in the longer term will create imbalances as they divert funds from other areas. A return to market conditions is desirable for real economic growth and competitiveness. Under the current circumstances, the stability and intermediation role of the banking sector must also be further strengthened to ensure economic development.
Economic growth above the EU average requires an active and strong banking sector in Hungary. Over the past year, the Hungarian banking sector has been able to further intensify its lending and deposit collection activity, as well as its portfolio of government bonds, whilst strengthening its capital position.
We are confident that the Hungarian banking sector, in co-operation with the Government and the Central Bank, will be able to continue to act as a solid driver of economic growth. Such a co-operation could increase the country's ability to attract capital, further strengthen confidence in banks, and, together, these factors could improve the country's international position, leading to a more appropriate rating. To strengthen the latter, the Hungarian Banking Association continues to play an active role in European and global financial organisations.
We are deeply concerned and feel compassionate about the situation in Ukraine, and will strive to lead by example in the support and assistance we offer. The armed conflict in our neighbourhood affects us deeply due to its proximity as well. The war has led to a decline in production, a freeze in direct economic relations, as well as international sanctions, which all exacerbate global supply chain disruptions and increase the risk of inflation. In this situation, the Hungarian Banking Association is committed to preserving the stability of the financial system.
At the General Meeting, awards were also granted to recognise achievements in the past year.
Winners of the Golden Beehive Award:
Magdolna Basáné Kovács (K&H Bank)
Péter Csányi (OTP Bank)
Ágnes Erdős (Bank of China)
Balázs Grenczer (Erste Bank)
László Gyula Nagy (Takarék Jelzálogbank)
Zoltán Tóth (Hungarian Leasing Association)
The Hungarian Banking Association elected new leaders in several vacant positions. New Member of the Board of the Hungarian Banking Association: Balázs Tóth (Unicredit Bank); new Chairman of the Supervisory Board: Guy Libot (K&H Bank); new Members of the Supervisory Board: Andrea Schopp (Oberbank), András Sándor (Takarékbank). The General Meeting elected the new Leaders until the next general election of officers to be held in 2023.
Budapest, 20 May 2022
Hungarian Banking Association