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MFB gets HUF 10 bln capital raise

The state-owned Hungarian Development Bank (MFB) is getting a HUF 10 billion capital injection to support its secure operation under a government decree published in the latest issue of official gazette Magyar Közlöny.

Of the total injection, HUF 2.5 billion is to raise registered capital and HUF 7.5 billion is to be placed in capital reserves.

Asked by MTI, the National Development Ministry said the government is making a priority of supporting MFB's activities in the interest of achieving its economic policy goals. Ensuring MFB's stable capital position, especially after the global financial crisis, is a clear necessity, it added.

The government decided to inject capital in the bank in multiple steps to bring its net assets back to levels over HUF 140 billion before 2009, the ministry said. The HUF 10 billion capital injection at the end of May came from HUF 25 billion in budget savings due to cost-cutting measures and will raise MFB's net assets to HUF 130-132 billion it added.

MFB had unconsolidated IFRS net assets of HUF 123.3 billion on December 31, 2010, down from HUF 141.7 billion twelve months earlier, the bank's balance sheet shows.