Magyar Bankholding, new banking sector runner-up, starts operation


Magyar Bankholding, the 2nd largest banking group in Hungary, started effective operation on Tuesday, after the National Bank of Hungary (MNB) approved the merger of Budapest Bank, MKB Bank and Takarék Group, and the shares of the lenders were transferred to the joint holding company, the parties in the transaction said, according to a report by state news wire MTI.

With the completion of the in-kind contributions, the owners of MTB Magyar Takarékszövetkezeti Bank (MTB), the "central bank" for Hungary's integrated savings cooperatives, now holds a 37.69% stake in Magyar Bankholding; the owners of MKB hold 31.96%; and the state, as the owner of Budapest Bank, holds 30.35% through Corvinus International Investment.

Magyar Bankholding will exercise prudential control and group management functions over the three banking groups and will plan and manage the merger process.

The detailed merger roadmap and business strategy will be developed in 2021.

Budapest Bank, MKB and Takarékbank will retain their legal status and will operate as separate entities with independent brands until their integration. However, they will tap synergies from their joint operation "immediately".

Magyar Bankholding's chairman will be Zsolt Barna - a former executive of OTP Bank, Hungary's biggest commercial bank, who headed several of the lender's units in the region - and its CEO will be József Vida, who heads Takarékbank.

Magyar Bankholding's balance sheet could be close to HUF 5.8 trillion, including HUF 3.6 tln in loans and HUF 4.3 tln in deposits. It would have 1.9 million clients and 920 branches.

Plans for a Takarékbank-MKB-Budapest Bank tie-up were initially announced in the spring.

A week earlier, the government declared the merger of "national strategic importance", thus exempting the deal from the scrutiny of the Competition Office (GVH).

In a separate disclosure posted on the website of the Budapest Stock Exchange on Tuesday, MKB said the value of the shares it contributed to Magyar Bankholding was booked at HUF 173.6 bln, based on a valuation by independent experts.

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