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FHB to be first bank to receive bank-package support

FHB Bank will likely be the first bank to receive funding from the Hungarian government's HUF 600 billion (€1.98 billion) bank-support package, MTI has learned from banking sources.

Officials from neither FHB nor Hungary's finance ministry would comment on the report.

In a move separate from the bank-support package, earlier this week the government granted FHB a €400 million loan which the bank must use to provide retail and corporate loans.

Finance Minister János Veres recently revealed that a majority Hungarian-owned bank had applied for funds available as part of the government's banking support package.

FHB and Takarékbank are among the only major majority Hungarian-owned banks.

State-owned banks such as the Hungarian development bank MFB and Eximbank are also eligible for the rescue-package funds, which the government raised through its loan from the IMF.

FHB will likely receive funding from the bank-support package in the form of capital, since the guarantees contained in the rescue package are not yet available.

The state will delegate members to a bank's boards and would limit top managers' salaries if a state capital injection is granted from the package at a bank's request.

The Hungarian state owns, however, 4.11% stake of FHB's priority B-category shares and maintains a presence on the bank's board anyway.

Takarékbank CEO Péter Csicsáky said that bank, which handles the liquidity needs of savings cooperatives, does not need supplementary financial sources. Savings cooperatives have combined free liquidity of nearly HUF 500 billion and their lending position could be strengthened through swapping part of this into foreign currency, Csicsáky told MTI.

MTI has learned that MFB and Eximbank, which belongs to the MFB group, are interested only in the guarantees contained in the bank-rescue package. MFB could be interested in taking out a loan too.

Hungary's finance ministry told MTI that a draft government decree finalizing guarantee details had been sent to the EU for review, thus only the support-package's capital funding is currently accessible. The application deadline for the capital funding was extended from the end of March to the end of December.

The government's HUF 600 billion bank-rescue package includes HUF 300 billion for raising the capital of banks and HUF 300 billion in guarantees. The package was set up by recent legislation and is to be financed from an IMF loan agreed to Hungary late last year. (MTI – Econews)