CEO: Some degree of foreign ownership in MKB preferred

Initiatives

The National Bank of Hungary (MNB) would prefer some degree of foreign ownership in MKB Bank which is up for privatization, CEO Ádám Balog told Reuters in a statement that was also sent to Hungarian news agency MTI yesterday.

"The National Bank of Hungary (MNB) prefers an ownership structure that ensures MKB remain a strong and independent member of the Hungarian banking system, and does not merge into an existing entity," Balog said, adding that this could mean drawing in foreign owners.

"Moreover, a certain degree of foreign ownership is decidedly preferred," he said.

The state wants to sell at least 51% of MKB in an international tender, but the stateʼs stake could be reduced to as little as 10-20%, Balog said.

The sale of MKBʼs non-performing loans could generate some losses, but this will not impact the bankʼs capital adequacy ratio which stood at 14.7% at the end of June. Private investors could always buy MKBʼs €700m-750m of distressed assets at 25-30% of book value, he added.

"Transactions underway must be wound up within weeks," he said.

MKB could turn a "modest profit" already next year, he added.

The MNB, which exercises ownership rights over MKB, announced the launch of the sale of MKB on Friday. The state acquired the bank from BayernLB a year ago.

Potential institutional and private investors may participate in the tender for the bank by invitation, the MNB said, adding that it aims to "complete the process" of the sale by the end of 2015.

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