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Jun 30, 2016

MKB Bank sold to consortium of investors

The sale price was 37 bn HUF, more than the 32 bn HUF indirect government support the European Commission found MKB to have received during its restructuring

The National Bank of Hungary has closed the sale and restructuring of state-owned MKB Bank and transferred ownership of the lender to a consortium of three investors, it said in a statement today.

MKB Bank is now owned by Blue Robin Investments and private equity fund METIS with 45 percent stakes each, and Pannonia Pension Fund, which will take a 10 percent stake.

The sale price was 37 bn HUF, more than the 32 bn HUF indirect government support the European Commission found MKB to have received during its restructuring after the Hungarian government bought it from Bayerische Landesbank in 2014.

MKB's balance sheet total was 1,954 bn HUF at the end of 2015. The bank had a total loan stock of 722 bn HUF and held deposits of 1,379 bn. MKB posted 76.4 bn of negative profit last year, which amounts to roughly half of the losses incurred in 2014 . Excluding the one-off losses associated with the liquidation proceedings, last year's losses totaled 1.2 billion HUF.

At a press conference held by the new owners, reporters learned that the old and new owners met through JP Morgan, and also that MKB will soon launch an employee share program.

Mystery investor Rakesh K. Aggarwal, a press favorite, was also introduced at the event, although the final investors behind the funds were of course not revealed, reports Portfolio.hu.

Barna Semsey of Blue Robin Investments said the employee share program could encompass 15 percent of the bank's shares, although whether this is to be a ratio of the old or the new shares has not yet been decided, he added.

There are ongoing informal talks to also acquire a stake in the EBRD as well, Semsey told reporters.

Blue Robin Investments typically buys stakes of 10 to 15 percent, and the deal could be finalized by the end of the year.

At present, MKB does not wish to acquire a stake in Budapest Bank, the new owners said in response to a question, saying that it was "topical" due to EU-related undertakings.