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EXIM in Transition in Wake of CEO’s Death

No permanent successor has been appointed since EXIM’s CEO, Zoltán Urbán was found dead on a ski slope in Austria on December 30, but in the meantime the parliamentary opposition is casting doubt on whether the export-import bank is needed at all.

Zoltán Urbán speaking to the BBJ in mid-December. Photo: EXIM Bank.

According to the spokesperson of the District Attorney’s office in Salzburg, the investigation concerning Urbán’s death is still ongoing, with final findings to be released within a matter of weeks, website atlatszo.hu reports.

The DA emphasized that standard procedure was being followed, which takes place in the case of every unexplained fatality. An autopsy has established that the banker died of a heart attack; he had been found on the ground by friends, and although rescue teams arrived within minutes, he could not be revived.

Urbán, born in 1960, has been in charge of the government-owned Hungarian Export-import Bank Plc. (EXIM) since 2015. He was a respected banker who had previously held management positions at OTP Bank, Hypo Vereinsbank Hungária, the Hungarian Development Bank (MFB), Dresdener Bank Hungária and Garantiqa. Among others, he had been board member of the European Investment Bank for six years and he was also on the board of the Hungarian Banking Association.

“He actively participated in the development of the Hungarian economy for nearly three decades by assuming top executive roles in domestic and international banking. His entire life was characterized by dignity, professional humility and friendly helpfulness,” the Hungarian Banking Association said in a statement published after Urbán’s death.

Meanwhile, EXIM has issued its own statement about how day-to-day operations are affected by the loss of its leader. “Exercising its ownership rights, the Ministry of Foreign Affairs and Trade has taken the necessary steps to ensure continuous running. In the transition period, CEO duties shall be performed individually by András Puskás, deputy CEO and Gergely Jákli, managing director. EXIM shall continue to operate along its mid-term business strategy for 2017-2021 adopted by the founder.” It declined to answer other questions when contacted by the Budapest Business Journal.

Under Stress

According to atlatszo.hu, renowned banking executives, who wished to remain anonymous claimed Urbán had “grown years older within the past 18 months, he was apparently under a lot of stress”. One cause of that might have been the fact that Hungary lost a legal dispute against Eurostat this summer, after the European Committee on Monetary, Financial and Balance of Payments Statistics (CMFB) classified “Eximbank in the General Government Sector as a unit having the features of a captive financial institution controlled by government”.

The significance of that ruling is that it would mean government debt would grow by hundreds of billions of forints, as Hungary had not been including EXIM’s figures as a government cost item. The cabinet had desperately wanted to avoid this, and atlatszo.hu alleges that Urbán might have felt he was being blamed for the unfavorable outcome, since under his leadership arguments supporting the government stance were prepared.

Now the parliamentary opposition seem keen to capitalize on the turn of events. LMP politician Péter Ungár pointed out that, in accordance with the new calculation method (and also including the massive Russian loan for the Paks Two nuclear power plant expansion), government debt now equals that of 2009. Therefore, Fidesz has lost credibility over its much-vaunted anti-debt campaign. Ungár added that, in its current form EXIM is no longer needed since it cannot point to any specific project that has benefited the Hungarian economy.

Urbán had talked to the BBJ in mid-December (see “Half of EXIM’s Loans to go to SMEs by 2021” in the December 15 issue) when he identified EXIM’s top priority as equipping local SMEs with the financial means to enter global markets. In another recent interview, he highlighted that EXIM’s focus should be shifted to help partners active in “risky” markets. He also wished to see export-bound loans and insurance double, as well as the number of countries affected by export financing through EXIM.