The Hungarian financial sector has undergone rapid change and development in recent years. Changes that commenced in the 1980s continued into the 1990s, establishing a multi-faceted, broad-based industry regulated by legislation aimed at harmonizing the Hungarian financial sector with that of the EU.
The financial sector counts some 44 retail, commercial and consumer finance banks, over 80 investment companies and brokerage houses and 30 or more representative offices of foreign banks and financial institutions.
Recent years have seen substantial growth - one could in fact speak of a boom - in the industry, with banks expanding their range of services and networks. Foreign banks have been strong in establishing themselves in the market either through joint ventures or by buying into the market through the privatization process.
With an improved country rating, greater liquidity, a relatively stable market place and the appetite of banks for new business, competition within the finance sector is intense.
Off-the-shelf products continue to be at the forefront and are for the most part price-driven. The lending business has been generally short-term in nature - both as regards forint loans and foreign currency loans; yet in recent months loan tenors have started a push towards the medium term.