Central bank takes over for MKB board
Experts chosen by the National Bank of Hungary (MNB) took over the tasks of the board of MKB Bank and will cooperate with members of the management, central bank deputy governor Ádám Balog said at a press briefing on Friday, adding that decisions on further changes to staff at the bank will not be necessary for the time being.
The Hungarian government and the central bank jointly announced on Thursday that the MNB would take over ownership of MKB Bank from the state and guarantee the liquidity of the lender.
According to Balog, although MKB Bank was not insolvent, trends were observed that provided the basis on which the MNB had the right to take over MKB Bank's management under the bank bailout law. Bad assets account for 15-20% of the bank's portfolio at present, he said, adding that if the central bank had not taken action, MKB Bank could have gone bust within a year.
Balog added that the central bank is still considering whether the assets placed in MKB Bank's own "bad bank" could be transferred to the central bank's recently established targeted asset manager, but such a move is not on the agenda for the time being. According to Balog, the European Central Bank had been informed of the MNB's takeover of MKB Bank "in due time".
The Hugarian state and Germany’s BayernLB jointly agreed that Hungary would buy MKB bank for €55 mln following the seller’s capital increase of €270 mln at the bank. In addition to its lending activities, MKB Bank has factoring, pension fund, health fund, fund manager, insurance, leasing and private banking businesses. It had consolidated total assets of HUF 1.9 trillion at the end of June.
In the first half of the year, the MKB Bank had a pre-tax loss of EUR 60m, according to an earnings report released by its owner.
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.