MNB sells stakes in MKB insurance units for €1 mln
The National Bank of Hungary (MNB) has sold stakes in the insurance units of MKB Bank to their majority owner Versicherungskammer Bayern for €1 mln, MKB Bank said today. The MNB sold 36.5% stakes in MKB's general insurance and life insurance units, leaving the bank with a 1% stake in both.
MKB also said a separate, independent company, called MKB Pénzügyi, would be established into which its bad assets would be placed.
The state acquired MKB from BayernLB in September of last year. It was announced in December that the MNB would exercise ownership rights over the bank, providing it with a safety net, cleaning up its portfolio and managing it for a period of up to one year. The step was taken under bank bailout legislation passed last summer.
MKB said on Thursday that its insurance units had been sold to avoid capital injections necessary for business growth. These investments were not expected to be recouped in the mid-term, it added.
MKB said it would continue to profit from an exclusive strategic partnership, adding that that the companies would continue to bear the MKB name and noting its 1% stake in both.
The goal of MKB's reorganisation is to rationalise the bank's operation, getting rid of unnecessary cost factors to allow it to operate with growth potential in the long term, according to the statement.
The MNB is using all means at its disposal to ensure the restructuring continues smoothly, MKB said. The process will not affect the continuity of the bank's services, rather clients should be positively affected by the results of the programme, the bank added.
The MNB earlier confirmed, responding to a query by MTI, that it had removed some of MKB's top management and installed a group of experts, under central bank supervion, who would work with the remaining management on the restructuring.
In addition to its lending activities, MKB Bank has factoring, pension fund, health fund, fund manager, insurance, leasing and private banking businesses. It had consolidated total assets of HUF 1,909 bln at the end of June 2014.
In the first half of last year, the MKB Bank had a pre-tax loss of €60 mln, according to an earnings report released by its owner.
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