Proceeds of MKB sale to go to Bailout Fund
The proceeds of an eventual sale of state-owned MKB Bank will go to the Bailout Fund, to save banksʼ and their clientsʼ money, the National Bank of Hungary (MNB) said today.
“The National Bank of Hungary trusts that MKB Bank – now with its portfolio cleared of bad assets – will successfully be sold at a price that is higher than the original purchase price. If this transpires, the state will benefit particularly from the transaction as the proceeds from the sale will go to the Bailout Fund, which is necessary to maintain financial stability and whose establishment was mandated by European Union rules,” the central bank said.
“The transaction will affect neither the central budget nor state debt. Thus the top-up of the Bailout Fund will not take place with money from banks or their clients,” it added.
Parliament established the Bailout Fund in 2014 to support the functioning of troubled financial institutions, giving them a “more advantageous alternative to insolvency”. The fund is supported with mandatory contributions by banks and investment companies. In its first calendar year of operation, contributions of HUF 2.5 bln were made to the fund.
The state acquired MKB from BayernLB in 2014 but the lender is expected to be re-privatized by the end of this year.
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