Reports
KBC Profits Tumble After Hungary Hit
Belgium’s biggest bank KBC recorded a steep fall in profits after being hit hard by a new law on retail loans in Hungary.
[KBC">KBC, Belgium's biggest bank by market value, recorded a
steep fall in profits after being hit hard by a new law on retail
loans in Hungary.
Its underlying profit dropped 41 per cent in the second quarter to €287 million($384.1 million).
The bank has set aside a €231 million provision to cover the consequences of a new Hungarian act on retail loans which it said had hit its results in the three months from April to June.
A Hungarian court ruled in June that banks had previously overcharged customers for some loans. A law drafted by the government and passed last month will force banks to repay customers for charges and interest rate hikes on loans deemed unfair.
The European Central Bank has warned this could destabilise Hungary's financial sector and questioned whether the retroactive effect of the law violated European Union rules.
Otherwise, the results of its main Belgium and Czech Republic businesses were in line with the average of the preceding four quarters.
In its international business, a net loss of €176 million was slightly better than the average of the past year, with the positive results in Bulgaria and Slovakia wiped out by Hungary and Ireland.
KBC still owes €2 billion of the €7 billion state aid it received at the height of the credit crisis.
It also aims to have repaid all outstanding state aid by the end of 2017.
Its underlying profit dropped 41 per cent in the second quarter to €287 million($384.1 million).
The bank has set aside a €231 million provision to cover the consequences of a new Hungarian act on retail loans which it said had hit its results in the three months from April to June.
A Hungarian court ruled in June that banks had previously overcharged customers for some loans. A law drafted by the government and passed last month will force banks to repay customers for charges and interest rate hikes on loans deemed unfair.
The European Central Bank has warned this could destabilise Hungary's financial sector and questioned whether the retroactive effect of the law violated European Union rules.
Otherwise, the results of its main Belgium and Czech Republic businesses were in line with the average of the preceding four quarters.
In its international business, a net loss of €176 million was slightly better than the average of the past year, with the positive results in Bulgaria and Slovakia wiped out by Hungary and Ireland.
KBC still owes €2 billion of the €7 billion state aid it received at the height of the credit crisis.
It also aims to have repaid all outstanding state aid by the end of 2017.