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Hungary, EBRD buying into Erste Bank here

History

The European Bank for Reconstruction and Development (EBRD) and the Hungarian state will each take 15% ownership in Erste Bank Hungary by increasing the capital of the bank, Andreas Treichl, CEO of Erste Bank, said this afternoon, according to Hungarian news agency MTI.

Reuters reports that the deal was made on condition that the Hungarian government adopts more favourable banking policies, which would presumably include a reduction of the banking tax.

"If there is a change in the framework for the financial sector, we will invite both parties to invest in our local entity," Erste spokesman Michael Mauritz said, according to Reuters.

The Hungarian government, which has announced its desire to increase local ownership of banks in this country, has been on a buying spree, picking up MKB Bank in July and then Budapest Bank in December. Government officials say they will eventually sell those banks to Hungarian business people, and they have also stated their intentions of merging those two purchases.

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