Magyar Takarék acquisition of Takarékbank shares

Initiatives

The National Bank of Hungary (MNB) has cleared the acquisition by Magyar Takarék of a stake reaching 50% in Magyar Takarékszövetkezeti Bank, thus giving FHB Mortgage Bank an indirect stake in Magyar Takarékszövetkezeti Bank (Takarékbank) of 10-20%, FHB said on the website of the Budapest Stock Exchange on Monday.

The transaction will take place through the purchase of shares and is expected to close in the first half of 2014, FHB said. Magyar Takarék stands "in close links" with FHB, the bank said.

The state-owned Hungarian Development Bank (MFB) and postal company Magyar Posta signed a contract on the sale of a 54.8% stake in Takarékbank, the "central bank" for Hungary's savings cooperatives, to Magyar Takarék for more than HUF 9 billion in March.

Following the successful close of the transaction, the direct and indirect stake of savings cooperatives and their management in Takarékbank will rise close to 85%, the sellers said at the time.

With the transaction, the Hungary state has fulfilled its obligations under the law, selling its temporarily acquired majority stake in Takarébank to a company majority-owned by savings cooperatives, the statement said. The savings cooperatives participating in the project company will finance the purchase from their net assets, the sellers said.

FHB Mortgage Bank acquired a 25% direct stake in Magyar Takarék for HUF 252 million in February. The majority owners of Magyar Takarék are Hungarian savings cooperatives, FHB said at the time.

Takarékbank was taken over by the state last year as part of a government-mandated integration of the savings cooperative sector. The bank was given powers to determine standards for risk management, business policy and strategy for all savings cooperatives that are members of the integration. The integration aimed to create synergy and help savings cooperatives meet stricter European Union capital adequacy requirements.

In April, the Budapest Municipal Court asked the Constitutional Court to annul the law on integration, arguing that it violated ownership rights and was incompatible with fair competition. The Constitutional Court will decide on the matter within 90 days, during which time the transfer of Takarékbank shares by Magyar Posta has been prohibited.

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