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MKB Bank set to list shares on bourse in 2019

MKB Bank plans to sell a stake of between 20% and 30% on the Budapest Stock Exchange (BÉT) next year to meet the terms of a European Union-sanctioned bailout, CEO Ádám Balog told news wire Bloomberg in an interview on Wednesday.   

The exact size and timing of the sale will be determined by the bank’s owners, Balog said, according to the Bloomberg report.

“We’re planning a significant listing and I’d like to do it earlier than later, for example at the start of 2019,” the CEO was quoted as saying. “For sure we’re going to sell a minority stake.”

He added that Hungary’s fifth largest lender would consider the purchase of Budapest Bank, which the government bought from GE Capital in 2015, if it was to go on sale - although the report notes that MKB is barred from buying lenders until the end of 2018.

The state acquired MKB Bank from BayernLB in 2014. The lender was privatized in 2016 following a restructuring by the National Bank of Hungary (MNB), where Balog was a deputy governor at the time.

Bloomberg recalled that MKB posted its second consecutive year of profit in 2017 after six years of losses as a BayernLB unit. It noted that careless lending, especially on commercial real estate in the case of MKB, turned toxic when the global financial crisis hit Hungary and forced the country to obtain an international bailout.

Bloomberg noted that the controversial privatization process eventually made Lőrinc Mészáros, a close ally of Prime Minister Viktor Orbán, MKB’s biggest indirect shareholder. It added that the conglomerates he controls, Konzum Nyrt. and Opus Global Nyrt., are constantly in need of financing as acquisitions spanning media, energy, construction and tourism made them among the world’s best-performing stocks last year.