Hungarian state to acquire GE’s Budapest Bank

Deals

The acquisition of the smallest of Hungary’s large banks by the Hungarian state requires nothing more than a stamp of approval from Prime Minister Viktor Orbán to be finalized, nol.hu reported yesterday. 

The news comes after weeks of widespread rumors in the banking sector that Banco Santander and the Hungarian state were bidding for 100% of shares of the commercial bank, currently owned by General Electric Group. Budapest Business Journal reported earlier in November that unlike the heavily loss-making MKB recently acquired by the state, Budapest Bank has been less exposed to retail FX financing and real estate projects, and could remain profitable in the years to come in spite of the levy imposed on banks by the current government. Budapest Bank’s HUF 9.5 bln net profit in 2013 – HUF 8.7 bln according to 444.hu – came mostly from financing SMEs.

Prime Minister Viktor Orbán hinted in November that as much as 60% of banks in Hungary could become “Hungarian owned” very soon; this is well above his previous target of 50%. These banks will have to be privatized at a later date, but ownership should remain Hungarian, Orbán added, in an interview with a state-owned radio station in November, nol.hu reported.

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