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Gov’t to set up compensation fund for clients of Széchenyi Bank

The government is establishing a compensation fund for the depositors of the failed Széchenyi Commercial Bank, Prime Minister Viktor Orbán said at a press conference with the central bank governor on Thursday. Orbán said HUF 5.5 bln would be in the fund.

The National Bank of Hungary (MNB) withdrew the license of Széchenyi Commercial Bank early in December, citing irregularities. The state holds 49% of the bank, which had total assets of just under HUF 52 bln at the end of last year. The majority owner is István Töröcskei, the CEO of Hungary's Government Debt Management Agency (ÁKK).

Töröcskei tendered his resignation shortly after the bank went bust. National Economy Ministry state secretary Gábor Orbán said earlier that chronic capital shortfalls had been the most important irregularity at Széchenyi Commercial Bank. The majority owner made attempts to remedy the situation, but the Ukrainian-Russian conflict as well as other reasons caused these to fail in the summer and the autumn, he explained. The state had no legal means with which to raise capital in the bank, he added.