AXA Bank Europe halts forex lending in Hungary.

By bne IntelliNews June 23, 2010
AXA Bank Europe, a unit of French insurance and financial group AXA, will cease foreign currency-denominated lending in Hungary, the bank announced. It explained that the move was prompted by recent changes in the banking legislation in the country, noting that the legal framework will in practice eliminate the market of forex loans. The bank referred to new regulations, enforced from the beginning of June and requiring banks to estimate the maximum amount of monthly instalments, which a borrower could repay, based on income. The actual instalments were limited by law to up to 80% of the amount for euro-denominated loans and 60% for loans, denominated in other foreign currencies. AXA Bank Europe stated that it would reconsider resuming lending in euros in Hungary in case the market and regulatory framework change and provide more favourable conditions for euro-denominated mortgage lending. The bank still stressed that it acknowledged the efforts of the government to improve the currency structure of the households' borrowing in the country in order to reduce inherent risks.

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