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Analyst: Bank Tax Reduction Could Have Positive Impact On Hungary’s Rating

Tamás Székely 2015.02.12.

The government’s plan to reduce the bank levy could have a positive impact on Hungary’s sovereign rating, Reuters quoted an analyst for Fitch Ratings as saying. “One key policy would be to reduce this tax on the banking sector and that I think would be positive for our assessment,” Arnaud Louis said. “But I would really like to wait and see what is going to happen. Because there have been some announcements in the past and we have learnt to be cautious with Hungary,” Louis added.

Hungary’s government signed a memorandum of understanding on Monday that outlines a gradual reduction in the bank levy in 2016- 2018. From 2019, the scale of the levy will be “further aligned with the prevailing European Union norms”, according to the MoU. “Anything that could bring the bank regulatory environment more in line with best practices, increase predictability for the sector, we would see it as a positive,” Louis said, Reuters reported.

Fitch Ratings affirmed Hungary’s sovereign rating at ‘BB+’, a notch below investment grade, last November. The ratings agency acknowledged a rebound in Hungary’s economic growth last year but warned that “the unpredictable business environment may affect investment in future”.

via reuters.com and hungarymatters.hu photo: public domain