Varga: Price of Erste stake to be determined in May

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The price the Hungarian state is required to pay for a 15% stake in Erste Bank Hungary will be decided based on an independent auditor's due diligence which could begin at the end of March and be determined by the end of May, National Economy Minister Mihály Varga told state-owned M1 television late yesterday.

In response to the interviewer’s query whether a price of HUF 10-20 bln would be “fair”, Varga declined to answer as he is “not an auditor and has not looked into Erste’s balance sheet”, however, he added that if “the price is close to that” he believes it “will be worth it for both the EBRD and the Hungarian government”.

The European Bank for Reconstruction and Development (EBRD) and the Hungarian state announced yesterday that each would take a 15% ownership in Erste Bank Hungary by increasing the capital of the bank, Andreas Treichl, CEO of Erste Bank, said yesterday afternoon, according to Hungarian news agency MTI.

Reuters reported that the deal was made on condition that the Hungarian government adopts more favorable banking policies, which would presumably include a reduction of the banking levy.

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