Market viability key factor for determining MKB future
MKB Bank aims to be a viable business, and achieving this goal will determine whether its owners decide or not to sell it, the bank's incoming CEO Pál Simák said in an interview published by online portal Index on Wednesday.
Simák blamed MKB Bank's losses in 2010 and 2011 mainly on the bank's Romanian unit, but he said a loss of more than HUF 29 billion on the government's early foreign currency-denominated mortgage repayment scheme, at discounted exchange rates, and the payment of almost HUF 13 billion on an extraordinary bank levy also affected 2011 earnings negatively.
Simák said the bank's exposure to loss-making real estate project financing had to be reduced, but added that this portfolio still contained good loans for shopping centers and office buildings.
He said strengthening the retail and SME segments were at the centre of the bank's new strategy. He added that financing for big companies remains important for the bank, but it seeks to maintain its market position rather than expand.
Asked why MKB Bank's owners did not sell their assets in Hungary because of the unstable political climate, Mr Simák said any decision on the matter was up to majority owner BayernLB.
"What is for certain is that MKB Bank has to be made a viable business, as negotiations on state aid for BayernLB underway with the European Commission will probably affect us," he said.
A restructuring plan by BayernLB, related to its receipt of state aid during the financial crisis, is under scrutiny by the Commission. The plan could involve the sale of some of the bank's assets in Eastern Europe, Econews reported earlier.
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.