Hungary's Brokers Rake in Dream Profits with Record-breaking Year

Published: December 07 2023

In Hungary, investment service providers have seen a significant increase in profits due to the influx of clients seeking to protect their money against inflation.

Brokerage firms in Hungary have achieved nearly the same amount of profit in the first nine months of this year as they did for the entire previous year. The taxed profit for this period amounted to 42.64 billion HUF, a 35% increase compared to the previous year. The pre-tax profit reached nearly 46 billion HUF, making it the highest ever recorded. This surge in profit can be attributed to the increased activity in the investment sector prompted by factors such as the war, currency exchange rate fluctuations, and high inflation.

The number of investment accounts in Hungary has seen a significant increase, with over 130,000 new accounts opened this year alone. As of September, there were a total of 2,062,703 investment accounts in the country. This growth has been driven by both experienced investors and newcomers who are looking to make investments and protect their money from inflation.

The Hungarian government plans to introduce state-owned investment accounts that will be available to everyone. While this may impact the business of banks and brokerage firms, as these accounts have no fees or commissions and can only be used for government securities, it is likely that investors will still require additional accounts for other types of investments.

Brokerage firms have experienced a substantial increase in the number of new accounts opened, with over 45,000 new accounts this year. The total number of investment accounts held by brokerage firms reached 425,000 by the end of the third quarter. Additionally, a significant portion of these accounts are tax-advantaged accounts, such as retirement savings accounts (NYESZ) and long-term investment accounts (TBSZ), which allow investors to avoid paying taxes on their investment returns.

The investment sector in Hungary has experienced record-breaking profits, thanks to the increased interest in protecting money against inflation. Brokerage firms have seen a surge in business and have achieved significant profits, attributing this success to various factors such as the war, currency fluctuations, and high inflation. As the number of investment accounts continues to grow, it is likely that the industry will see further developments in the coming years.

What is the current state of the investment brokerage sector in Hungary? The investment brokerage sector in Hungary is experiencing record-breaking profits, with brokerage firms achieving significant financial success.

What factors contributed to the increase in profits for Hungarian brokerage firms? Several factors contributed to the increase in profits for Hungarian brokerage firms. These factors include the war, fluctuations in the exchange rate of the Hungarian forint, and high inflation, which encouraged investors to move their money and invest, resulting in increased business for brokerage firms.

How many new securities accounts were opened by Hungarians in 2022? According to data from the National Bank of Hungary, by the end of September, there were over 2,062,703 securities accounts opened in Hungary this year. This indicates that over 130,000 new accounts were opened by Hungarians at banks, brokerage firms, and branches this year.

What is the plan of the Hungarian government regarding securities accounts? The Hungarian government plans to introduce a new type of securities account at the Hungarian State Treasury, where individuals can hold government securities. These accounts will be opened automatically for everyone, but additional accounts will need to be opened at market service providers for other types of investments.

How many securities accounts are currently managed by brokerage firms in Hungary? By the end of the third quarter, brokerage firms in Hungary managed a total of 425,000 securities accounts. Within this number, there were 25,000 retirement savings accounts (NYESZ) and 111,000 long-term investment accounts (TBSZ). This means that about a quarter of the clients took advantage of these accounts to avoid taxation on investment returns.

Did Hungarian investors speculate less in 2022 compared to the previous year? Yes, it appears that Hungarian investors speculated less in 2022 compared to the previous year. The continuous growth of client accounts led to higher profits through brokerage activities, rather than through speculative investments.