Hungary’s Competition Office clears MNB foundation’s real estate purchases

Sustainability

MNB headquarters in Budapest (Image by Jessica Fejos)

The Competition Office of Hungary (GVH) gave the go-ahead for the purchase of four new real estate properties by the National Bank of Hungary’s (MNB) controversial Pallas Athéné foundations (PADA), according to an update on the PADA website yesterday, Hungarian News Agency MTI reported.

The acquisitions were announced in mid-June, and consist of three properties in Budapest and one in Debrecen, to be used as offices for PADA. 

Zoltán Fekete, the CEO of investment company Pallas Athéné Optima Befektetési, said that the acquisitions amounted to less than one percent of the Budapest market and would have no impact on competition, which was supported by GVH’s resolution regarding the purchases, MTI reported.

The application to the GVH was submitted because MNB and PADA are viewed as one entity under Hungarian competition law, the website’s statement mentioned.

The foundations will continue to move funds out of government securities, which will “gradually be exchanged for yield-producing real estate, in line with the stand of the European Central Bank”, PADA stated.

The funds were initially made up of HUF 197.3 billion in Hungarian government securities, HUF 37.7 bln in equity, HUF 24.5 bln in real estate, and HUF 7.8 bln in bank deposits. The total assets of the six MNB foundations were reported at HUF 267.2 bln in March, up by HUF 800 mln over their original investiture.

The PADA foundations’ activities have drawn substantial criticism. The European Central Bank noted in its annual report published in April that it is continuing to monitor MNB programs, “which were not related to monetary policy and which could be perceived as being potentially in conflict with the monetary financing prohibition”.

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