MKB divests HUF 343 bln of bad assets in reorganization

Telco

State-owned MKB Bank will have divested of HUF 343 billion of bad assets by Christmas, Márton Nagy, a deputy governor of the National Bank of Hungary said on Friday. The National Bank holds ownership in MKB since buying the troubled institution about a year ago.

MKBʼs Property loans worth HUF 130 bln have already been sold to market players for HUF 96 bln, or 74% of their book value, Nagy said.

Another HUF 213 bln of bad assets will soon be taken over by asset manager Magyar Szanalasi Vagyonkezelő (MSZVK), for HUF 96 bln or 45% of book value, he said. The assets will be paid for with a HUF 100 bln loan from a consortium of banks led by K&H Bank and including Erste Bank, OTP Bank and UniCredit Bank, he added.

Under the current schedule, MSZVK will sell MKB by the end of the first half of next year.

Nagy said the National Bank hopes MKB will become profitable by 2018-2019 with a return on equity of around 10-12%.

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