2010.09.2008:33:00UTC+00Cbank's Governor Nowotny warns on Hungary foreign currency loans

News

• The head of Austria's Cbank warned that Mortgages in foreign currencies are an acute risk in Hungary, where homeowners borrowed heavily in Swiss francs and are now suffering from the forint's depreciation.
• Governor Ewald Nowotny and his Cbank have long been critical of Austrian banks, which collectively are the biggest lenders to Hungarian borrowers.
• A fresh rise in risk aversion has prompted investors to pile money into safe haven currencies, driving the Swiss franc to record highs against the euro and putting pressure on Hungary's currency and government bonds.
• In July, Hungarian households' Swiss franc loan stock  totalled a massive 5.7 trillion forints ($26.5 billion), or around 27 billion francs.
• Households' NPLs in the banking system rose to 8.1 pct in June from 7.3 pct in March.

Background

• Austrian banks including Erste Group Bank and Raiffeisen International collectively are the biggest lenders to Hungarian borrowers, according to statistics by the Bank for International Settlements.