The sale and purchase transaction between the old and new owner of MKB Bank was completed successfully and according to plans on 29 September, 2014. Pursuant to the agreement signed between Bayerische Landesbank and the Hungarian Minister of National Development representing the Hungarian State, the bank was brought into national ownership. The Government aspires to extend Hungarian ownership in the banking system, whereby the Hungarian population and enterprises become less exposed to banks in terms of financial services.
The agreement is in line with the government strategy aimed at a significant restructuring of the banking system, the goal of which is to increase domestic ownership in Hungarian banks. Experience from the financial crisis has shown that a banking system that is decisively in foreign ownership does not only make recovery from the crisis difficult but, due to the withdrawal of funds, makes it even deeper.
The Hungarian state paid EUR 55 million for 99.99 per cent of MKB’s shares, while the former German owner agreed to implement a capital increase of EUR 270 m at the bank before the transfer of ownership. The conditions laid down in the sale and purchase agreement having been met, the sale of MKB Bank was finalised. The original, rather tight schedule of the transaction was successfully kept and at the same time the change of ownership did not affect the bank’s usual course of business or adversely affect its customers.
At the general assembly held on the day of completing the transaction, the delegates of the seller were succeeded by the new owner’s representatives. The general meeting elected President of the Hungarian Chamber of Commerce and Industry dr. László Parragh, Advisor at the Ministry of National Development (MND) Viktória Nagy and Rector of Budapest Business School dr. Éva Kriszt Sándor as external members of the board of directors. Members of the supervisory committee are: Department Head of MND Ferenc Szabó, Head of Division of the ABT Treuhand Group Ferenc Smohay, Chief Advisor to the Minister of MND dr. Edit Juhász, Deputy Department Head of MND Adél Nagy and employees dr. Zsolt Garancsi and dr. Judit Buza Bánhegyi. András Sebők continues to hold the position of President-CEO of MKB.
The Government aims to make MKB an active and profit-making bank, considering which it is of outstanding importance to retain and extend the current clientele. The capital increase performed by the seller as a condition of the transaction and the high capital reserves available are sufficient to cover for potential losses in the coming transitional period. From 2016 on at the latest, the bank may be profitable once again. Accordingly, there is no capital increase expected of the new owner and the restructuring at the bank will not impose any burden on the state or taxpayers.
It is the Government’s intention to ensure that MKB continue to operate as a universal bank offering its current and future customers the usual high-standard services. In future, MKB wishes to play a more dominant role in servicing and financing domestic companies. The retail banking division is to be assigned a strategic role of equal importance: clients will meet developments of MKB in the fields of investment services and electronic channels in the near future already.
The detailed strategy is to be worked out and approved by the end of this year already. It can certainly be declared that the conditions for successful operation are available. In addition to the stable ownership background and the current capital conditions providing sufficient reserves, the expert team of the bank are also a key to MKB’s development.