Economy Hungary News

Hungary to sell Budapest Bank, again

Budapest, Hungary – Prime Minster Viktor Orbán has mandated his cabinet to hold talks with banks that could buy Budapest Bank at a price equal to or above what the state paid for the bank in 2015, says the official government gazette Magyar Közlön.

Orbán instructed the minister responsible for state assets to conduct the talks and inform the cabinet about the results by June 30.

Founded in 1987, Budapest Bank was initially sold to GE Capital, the financial arm of General Electric, in 1995 before being bought back for 700 million USD in June 2015. The state has now made clear its intention to privatize Budapest Bank once more.

A key plan in Orbán’s economic policy, according to Reuters, Hungary targets at least 50 percent domestic ownership in the banking sector, which has prompted speculation that Budapest Bank will, this time, end up in domestic hands.

In recent years, Orbán’s business allies have indeed made significant inroads in the banking sector, acquiring controlling stakes in MKB, one of the largest banks in the country, as well as FHB mortgage bank and the savings and loan cooperative Takarekbank.

Hungary’s banking sector is dominated by home-grown regional heavyweight OTP Bank, the largest commercial bank in Hungary with over 25% market share. OTP Bank has expanded rapidly in recent years, making record profits of about 1 billion euros in 2017, and now  serving clients in nine countries, including Slovakia.

Russian-born Hungarian businessman and wealthiest person in Hungary, Megdet Rahimkulov is the leading owner.

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