Official: Budapest Bank could merge with MKB

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National Bank of Hungary (MNB) deputy governor Ádám Balog (pictured) believes that the merger of Budapest Bank and MKB Bank sometime in the near future is a "very likely scenario", Balog said yesterday in an interview with commercial broadcaster Gazdasági Rádió.

According to the deputy governor, he felt it was premature to talk about a merger between Budapest Bank and MKB given that the two financial institutions are still competitors. He did note, however, that creating a single entity from the two would produce the second- or third-largest commercial bank in Hungary.

The state acquired MKB Bank from Germanyʼs BayernLB last year. It also agreed to buy Budapest Bank from GE, however, the transaction has not yet been closed, Hungarian news agency MTI reported. Balog said talks on the Budapest Bank sale would wind up in the coming months.

According to Balog, MKBʼs portfolio could be cleared by mid-summer and the "good" bank that remains could begin doing business.

He added that the central bank could not solve the problem of the 182,000 clients with non-performing loans alone. Introducing personal bankruptcy could help 25,000 of these clients, while the National Asset Management Company (NET) could assist a further 25,000-30,000, he said. Restructuring debt and extending loan terms could provide a solution for the remaining clients, he added.

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