Hungarian banks reported HUF 685 billion in consolidated after-tax profit in the first half of 2026, down 22% year-on-year, according to new supervisory data from the National Bank of Hungary.
The decline came despite continued growth in core banking income. Net interest income increased 7% to HUF 1,836 billion, while net commission and fee income slipped 3% to HUF 929 billion. Return on equity fell to 11.8%, down 4.3% from the same period last year.
Domestic banking profit falls even faster
Portfolio.hu notes that the consolidated HUF 685 billion result includes foreign subsidiaries and non-bank interests, especially those of OTP. On a non-consolidated basis, which gives a cleaner picture of the domestic banking business, after-tax profit fell even more sharply, by 26% to HUF 586 billion.
The Hungarian financial press linked much of the decline to the higher tax burden on the sector and the extension of measures affecting bank revenues. Portfolio estimated that the increase in the windfall tax and the continuation of the interest-rate cap together reduced the sector’s first-half result by close to HUF 300 billion.
The fall follows a still highly profitable 2025, when the Hungarian banking system generated HUF 1,454 billion in after-tax profit on a non-consolidated basis. The MNB said in its June Financial Stability Report that profitability remained high in historical terms, although bank levies and rising operating costs were already weighing on earnings.
Lending stock rises 8% to HUF 59.1 trillion
Banks continued to expand their balance sheets in the first half of the year. Total assets reached HUF 105.255 trillion at the end of June, up 7% year-on-year, while the total lending stock increased 8% to HUF 59.132 trillion. Deposits rose 6% to HUF 78.561 trillion.
Separate MNB lending data show that growth accelerated further in several key segments during the second quarter. Corporate loans were up 11.5% year-on-year at the end of June, while household lending expanded by 19.6%. SME loans increased by an estimated 11.1%.
Bad-loan ratio remains at 2.1%
Asset quality remained stable despite the rapid expansion of lending. The non-performing loan ratio stood at 2.1%, unchanged from a year earlier. The MNB had already described the sector’s credit quality as strong, noting that the share of non-performing loans had reached historically low levels by the end of 2025.
At the end of 2025, the preliminary capital adequacy ratio stood at 20.1%, while free capital available above regulatory requirements amounted to HUF 2.025 trillion.
Five banks control almost three-quarters of the market
Hungary’s banking sector remains highly concentrated. The five largest lenders controlled 74.1% of total banking assets at the end of June, while the ten biggest institutions accounted for 92.4%. Domestic ownership also remained dominant, with Hungarian owners controlling 67.1% of the sector.
