Belgium’s KBC booked a EUR 82m pre-tax impairment on retail foreign currency-denominated mortgage loans at its business in Hungary in the fourth quarter because of the forex mortgage early repayment scheme, the banking group said in its report for the period published Thursday.
Under the scheme, banks must give clients an exchange rate discount. About 30pc of the FX retail mortgage borrowers who are eligible for the scheme are participating at KBC’s Hungarian unit K and H.
The bank can book some of the impairment against payment due on an extraordinary bank levy, KBC Group noted.
KBC Group’s total loan impairment stood at EUR 599m in Q4.
Although KBC Group noted the impact of the impairment in Hungary on profits, the CEE Business Unit still booked a EUR 98m profit for the quarter.
The group blamed a 1pc quarter-on-quarter contraction in the lending portfolio of the business unit on activities in Hungary.