State purchases Budapest Bank for USD 700 mln

Competition

The state-owned Corvinus Nemzetközi Befektetési has transferred the USD 700 mln purchase price for a 100% stake in Budapest Bank to General Electric Capital Group, the Prime Ministerʼs Office said on Monday, according to state news agency MTI.

The funding for the purchase came from forint-based market financing raised by Corvinusʼs parent, the Hungarian Development Bank (MFB). Payment of the purchase price was calculated using a HUF/USD cross rate of 279.64, "which is more favorable than market rates at present", the PMʼs office said.

The purchase price will not cause state debt to rise, it added. The government of Hungary signed a preliminary agreement with GE to acquire the bank late last year, and it got the regulatory green light in the middle of June.

The process of taking over the bank will continue in the coming weeks, though the new owner plans no far-reaching changes to Budapest Bankʼs operation, business strategy or management, the office said. Clients should not be affected by the change in ownership, it added.

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