Decision on sale of Budapest Bank expected by yearʼs end

Deals

The coming weeks are expected to make clear the governmentʼs plans for Budapest Bank, which passed into state ownership in summer 2015, according to a Wednesday report in economic daily Világgazdaság.

The Hungarian Development Bank (MFB) - which purchased Budapest Bank from the American GE Capital through Corvinus International Investment Zrt. - has until December 15 to draw up its strategy for the coming year, and this includes deciding what it wants to do with Budapest Bank.

Dóra Selmeczi, spokeswoman for the government commissioner for postal affairs and national financial services, told Világgazdaság that several scenarios are envisaged with regard to the bankʼs future, which include examining the possible partial or entire sale of the institution. The final decision, however, will be made not by the MFB but by the government, whose interests may not coincide with those of the bank.

On the one hand, Budapest Bank is an efficiently functioning concern that is a valuable asset for the state, noted Selmeczi. On the other hand, she added, based on an agreement with the European Bank for Reconstruction and Development (EBRD), Prime Minister Viktor Orbán promised that the state would only temporarily remain owner of Budapest Bank and MKB Bank (the latter since sold in the summer). The promise to the EBRD means that in theory, the sale of the bank should already have been initiated this year, noted the spokeswoman.

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